Other companies may indeed force 45-50 hour work weeks plus weekends, cram them in elbow-to-elbow and give them health plans with a $3,500/year deductible, but it doesn’t mean you can sit pretty with your lead developer grinning and taking it. There’s four things a developer, like any other human being, wants from a job: competitive salary, comfortable environment, challenging work, and a future. If you keep filling vacancies at the top from outside the company, then the bright kids at the bottom will seek work elsewhere even if it pays the same but gives them a sense of having a career path. If you make them work in a closet with 4 other programmers and inadequate ventilation, they’ll bolt for the first place that gives them an office with a window. If you hire a whiz-kid and make him edit Microsoft Access forms in Visual Basic, you won’t see him after a few months. If they find another job that pays more but has longer hours and commute, they will take it because it’ll make them feel like they’re getting paid what they’re worth.

Of course, you could just hire H1B workers exclusively. That’ll last until they get citizenship, or the other country’s economy rises above ours.