Why do companies prefer to recruit new people with high salaries rather than give old employees a raise?

Some companies are more willing to recruit new people with high salaries than to give old employees a raise. There may be the following reasons:

The salary of the old employees has been higher than the market price: the salary of some old employees has exceeded the market level, and if the company gives them a raise again, it will lead to an increase in costs and even a decline in competitiveness. In contrast, by recruiting new people with high salaries, companies can obtain better talents in the market, thus enhancing their competitiveness.

The skills of old employees have fallen behind: some old employees may not keep up with the times in skills, and if the company gives them a raise, their work ability will not be improved. In contrast, by recruiting new people with high salaries, companies can obtain more forward-looking and adaptable employees, thus better adapting to market changes.

The incentive effect of old employees is decreasing: some old employees may work in the company for a long time, which has little incentive effect on the company's development. In contrast, new employees have more expectations and motivation for the company's future, which can better promote the company's development.

The welfare benefits of old employees are already very high: some old employees may have enjoyed good welfare benefits, such as medical insurance, pension and so on. In contrast, new employees can attract them to join the company through higher salaries.

Of course, not all companies will have this situation. Some companies attach great importance to old employees and will encourage them to continue to contribute to the company's development through various means, including salary increase, training and promotion.