Sure. I wasn't necessarily agreeing, just saying that may be their reasoning even if they are fully aware productivity drops. The original comment also said it doesn't cost anything "on paper."

Could this be a way of passing the cost to another department? Maybe a department manager is a slavedriver and knows it's not efficient long term, but he doesn't care as long as the costs (like replacement recruiting) don't come out of his budget. I don't know if that's how budgets really work though.