Many companies spend a lot of money to recruit new people but are unwilling to keep old people. Why is this?

We have seen in the company that employees who have worked hard for several years may get the same amount of money as new employees, or even less than new employees (wage inversion), and when old employees ask for a salary increase , the boss would rather spend high salaries to recruit new people than give old employees salary increases.

1. In most companies, you only meet the market conditions at the moment you join the company, and you must abide by the company's salary increase system when you enter the company. The company limits salary increases in order to control the company's rising labor costs and ensure balanced overall employee growth. Once more people receive special salary increases, the company's labor costs will increase significantly, and there may even be turmoil. Companies must keep salary increase budgets within reasonable limits. Even if you perform well, you can add bonuses, but it's difficult to skip the base salary. Therefore, it is difficult for an old employee to get a big salary increase within the company unless he is promoted. This kind of salary increase is obviously not in the interests of older employees.

2. Any company needs a flow of fresh blood. Some people leave and some come. Especially large companies often compete for talent. Newcomers have almost the same advantages as veteran employees: energy, freshness, and energy. When a company cannot recruit talents at abnormal salary levels for a long time, it naturally knows that it must adjust its budget. And this change is only for newcomers to the market. In fact, the annual remuneration of veteran employees has long been unable to keep up with the development of the market. This huge gap between inside and outside the market makes old employees unconvinced and forces them to change jobs in order to achieve a salary increase in line with the market level.

3. Enterprises can only survive by relying on profits. The essence of an enterprise is to create profits. If new employees can replace old employees and the payment cost is low, the company will definitely introduce new employees appropriately to maintain a certain degree of liquidity. Now we are in an era of rapid development. Without passion, vitality and creativity, it is easy to be abandoned by the times. In an enterprise, many old employees can easily lead to lack of competition and stagnation, which often requires some fresh blood to activate.

If a company wants to develop, it must retain talents. Every position and every department must be serious and responsible and work together to seek development. If a company's management emerges and would rather recruit new employees than retain old employees, the future of the company is also in doubt.