Credentials play an important part, but not the most critical role. Most organizations pay more than they would need to if they would just change the way they employee people. Yes, it is important to have a competitive package, but as long as you are competitive money is not the primary issue. You need to have a performance-based compensation system so the employee has the opportunity to increase salary based on performance. People want to get paid what they are worth, but then there are many more issues that are important - schedule, the work being done, location, who's on the team, development opportunities, etc.
Money is just part of the deal.
The number one non-financial incentive is control over schedule. Number two is the opportunity to attain marketable skills, number three is exposure to decision makers, and number four is the ability to put your name on tangible results. Too often this discussion doesn't take place until the employee already has a better offer. A lesson learned by the government is that people will work for less and stay longer if they have a mission in mind - the ability to make a difference in the community. The ability to perform a life mission is a good draw, but it doesn't result in increased retention.