It incentivizes building your pipeline with young people, investing in them, and then seeing that investment returned to you in the future when they move to a higher position somewhere else. In the meantime you are benefitting from their talent.
It's cynical to think about it, but if you made it the other way around you give a team a direct incentive to fire someone. This way you're incentivized to keep and develop people for when other people hire them away. If you're trying to increase the size of the pool this is a good way to do it IMO.