Isn't new talent more expensive than existing talent? If you've had employees that for years have been getting inadequate COL adjustments, they're cheaper to keep than getting market-rate talent.
If a company has had somebody stagnant for years (many years), they're not going to be replaced for cheaper. The crash might cancel the last couple years of inflation at most.
Also, the employee is much more experienced now (could go from junior to senior over 5 years). Will the replacement be equally experienced or starting from scratch again? A fresh experienced hire is certainly more expensive than what the employee was originally earning.