I'm not sure why companies prefer that someone leave and take all of their institutional knowledge with them, then hire someone new at a higher wage that would

I'm not sure why companies prefer that someone leave and take all of their institutional knowledge with them, then hire someone new at a higher wage that would have kept the first person at the company. They are not taking into account the value of knowledge. If your domain knowledge increases 20% within a year, then you should be getting a 20% raise. With the elimination of pensions, the only vesting time that most people have is for their 401k, which is usually only a couple of years. Not sure what employers are expecting to happen or why they're surprised when their hot college grad employees decide to leave for a big pay bump.