Maybe 5-10 years back, when Tech was everyone's darling and Wall St reputation was in tatters after 2008 crash, higher packages alone wouldn't have been sufficient. But tech is sufficiently tarnished now.
Company: "We need X, we're paying Y"
Friend: "For Y you're really looking more at Z"
Company: "We don't have the budget for Z, we're paying Y. And don't forget, we want the best"
Friend: "The pickings are slim, here is the best I can do"
Company: "These are all garbage"
3 months of mediocre candidates later
Company: "Holy shit we need to fill this role immediately, get a contractor! We'll pay Z*3
Friend: "Look at all these top tier candidates I have"
Role filled within a few days.
As soon as that developer is used to his half a million take home, which takes roughly three years, he'll start looking for a new pasture.
So the understanding has formed that in order to retain employees, you must show them that the grass over there is not actually that much greener. That we also have interesting projects (read: internal mobility), career opportunities and the aforementioned bean bag chairs.
This is false. A high salary fixes the loyalty problem. It won't, however, fix the motivation or competence problems.
> As soon as that developer is used to his half a million take home, which takes roughly three years, he'll start looking for a new pasture.
He won't if you're paying above market rates. Especially if that salary comes with strings attached. (Bonuses, stock, etc.)
The "strings" don't work that well either: deferred comp matching is pretty much standard these days.
"High salary" means "above market rate salary", i.e., you're the one who offers more than everyone else.
Yes, it does definitely create loyalty, to pretend otherwise is stupid. There are some things people won't do for money, but it's an awfully small list.
*Some conditions apply
Or /realist.
This works very well for the tobacco industry.