What I can see is that most companies and especially these where software developement is viewed as a necessary evil rather than a business model are very bad a

What I can see is that most companies and especially these where software developement is viewed as a necessary evil rather than a business model are very bad at telling bad candidates from the good ones and don't really hire based on merit. They might believe they do, but the outcome of the hiring process is usually erratic as far as it comes to the actual abilities. However once a developer is hired even a company with a flaky interviewing process tends to recognise the actual worth of a given programmer fairly quickly. Then an intresting thing happens - even though the developers might be explicitly treated as a commodity resource the very same managers would go far beyond the declared rules to retain the best: regularly up the package, give a lot of slack, turn a blind eye on minor "breaches of established rules". As a result most good programmers I know after about five years in the industry end up enjoying a package far in excess of what is being declared on the job sites. It's not uncommon for a hiring manager to moan about the lack of good candidates whilst paying the best developers on their team 50% more than they advertise when publishing the same job. What the management don't seem to realise is that just about every other company does that: actually paying more to the existing programmers than the declared range they would be prepared to pay for the new hires. As a result after a while there is little or no incentive for good developers to put their CV's on a market. They're well above the market rates. As a workaround sometimes companies hire good programmers as independent contractors and carry on extending the contracts forever - paying double or triple the rate they would pay their permanent staff. It's a funny game when becoming "an independent" consultant with a single customer is one of the few options for an experienced developer to help company management justify paying them the true market worth. There is no lack of good programmers, they just cost much more than most companies are prepared to admit.