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I remembered reading a compelling rebuttal of this Gartner study, so I
entered the subject into google.com, and found more than one rebuttal, so
recommend the exercise to those who appreciate google's results.

The article I was looking for is "Gartner, Take a Closer Look: Is Recruiting
Really Better Than Retraining Your Programmers", by Bob Lewis at
http://www.perotsystems.com/content/NewsandEvents/Articles/lewis/nov_6_2000.
htm. It's an informal article, but has some good things to say, such as
"It's pretty hard to take seriously an analysis that ignores recruiting
costs and hiring bonuses.", and:

A company that replaces long-time employees rather than retraining them will
do the same thing again for the next bunch. I'm guessing most Java recruits
will be familiar with Ann's (Ann Landers) advice, which means the chance
they'll be loyal to their new employer is exactly bupkis. The next good
offer they get and they're gone, and why not? The report ignores this
factor, but ironically it does comment on the risk of retrained COBOL
programmers either demanding a raise or leaving. Maybe it's assuming the
Java recruits will all be here on H1b visas, where they can't change
employers.
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I imagine that there are other good responses out there, as well.

My own $.02 is that if you are a large legacy shop, and you were looking to
hire a consulting firm (such as CGI...) to web-enable your legacy for
instance, wouldn't you be much more comfortable with a firm whose employees
knew, understood, and even liked your legacy environment, rather than one
who were sure that they could replace your entire infrastructure with a
sufficient number of clustered servers, of the kind they played with in
college just last year? (we can just download the latest...)

Didn't Mike Yawn have a cautionary tale about this in his excellent book,
The Legacy Continues?

Greg Stigers
http://www.cgiusa.com
insert std disclaimers