One would assume the solution is to simply offer a good package and retain employees with that. I returned to an old company after a few years of floating around because I realized they had the perfect mix of culture and benefits for me, even if the pay isn't massive.

You're falling for the exact same fallacy experienced by failed salesmen. "Why would I bother investing time in this customer when they're just going to take my offer to another dealership for a better deal?"

Answer: you offer a good deal and work with people honestly, because if you don't, you'll never get a customer.