The second time was when I was an engineering manager and 3/4 of our team quit for high pay within 6 months. Our application was a line of business app with a few thousand users. Our release dates went from being delayed a few months to over a year. The companies reputation was horrid, and hiring was impossible. My boss, a Director, sent me support people who could spell "java" and expected me train them from zero. I left that disaster soon after.
So yes, the risk is real, and the result can be calamitous.
My body metabolizes guilt readily, by converting it into resentment. “I have to be here and I hate you for it.” Is not a room anyone should walk into if there’s another doorway.
If the business responded appropriately, I think people could be convinced to stay.
E.g. if they offered:
1: An instant promotion with raise for anyone not at the max level for an IC, to acknowledge that they are now the most knowledgeable people on that product.
2: Double pay until those slots are filled and newbies are trained.
3: A contract saying they get a month of PTO when the slots are filled and newbies trained.
4: Assurances that they are offering above-market rates to get the slots filled quickly (which should still be lower than the new rates for people who stayed).
What usually gets offered is pittances. A 10% raise to work 30% more hours. Maybe some flex time. It doesn't make sense for workers to stay, they can usually get better benefits and lower working hours by leaving anyways. Businesses need to offer substantially more than employees can get elsewhere.
But I can understand how it is difficult for a business leader to convince himself that this jump in cost is, in fact, required. Maybe the person will just stick around? (And indeed, they do fairly often.)
At least in my instance, I've never seen the 10% raise, just the 30% more hours bit.