It's very simple, really. If you only raise salaries on personnel rotation, you do not have to raise salaries of those employees that do not jump ship. You save

It's very simple, really. If you only raise salaries on personnel rotation, you do not have to raise salaries of those employees that do not jump ship. You save a bundle if you have a large workforce. This attitude introduces a skew where your workforce gets progressively filled with people who do not switch jobs. It's a dangerous outcome, to be managed with care. If you get stuck with those who do not switch jobs because they are too incompetent, you have a big problem. If you manage to get those who are competent but content, and not very concerned with higher earnings, you have the ideal result: stable, competent, performant team, with controlled costs.