Most decent companies have two pools of money. One for raises, and one for retention. The key here is, the manager has to really fight for it. If they believe enough in the employee to battle for the retention dollars, I've typically seen it go well.

Here's the key, a lot of managers are too afraid, confrontation averse, or short sighted to make a fight for their employee.

I had a manager who used to tell, he was surprised how timid people at managerial levels act when it comes to fighting for their people.

There are cases where there isn't even a competition for funds. All you need to do is ask for a raise and it passes through without any problems, managers just don't do it because they are too afraid of even making that very request.

I remember the first time I went to my CTO to get a retention raise and, frankly, how easy it was. I think you're right in that there's a decent amount of money left on the table because the managers don't reach for it when they can.

That being said, I've always been able to get _SOME_ money for retention, but I've not always been able to get enough. If they go interview somewhere else and their current salary is $120K, it's entirely conceivable they could be getting an offer of $160 with a bonus structure that's better.

I've even encouraged employees to leave before when it sounded like they were going to get put into a position for growth that we couldn't offer. If they're already feeling stifled or short changed enough to go looking, any move you do to keep them now is just delaying the inevitable. If I let someone leave with a clear conscience, that's someone who could come back to the company even better than they left (it's happened a surprising amount of times in my career). It's also someone who can help me and/or my company in the future, whenever our paths may cross again.

I have followed managers to companies and I've had employees follow me to companies. If you just adhere to the damn golden rule things are a lot easier for everyone involved.

Maybe most managers see themselves as Company Representatives to their staff, rather than Staff or Team Representatives to the company management.

They do not fight for their people, they get work and outcome from them to achieve the company objectives.

Most probably they are right if they consider who will give them their next career opportunity.

ime, that's driven from the ceo/whoever actually runs eng down. Some places appreciate keeping the engineers who built a system around; other places prefer to pay more to hire new people and then have them spend 6 months getting up to speed. Those costs are invisible in the budget though; they just manifest as slower output.