They are paying more than they have to for the low skilled workers. Which means that extra money is not going towards hiring better high skilled workers or just more workers in general.

Everything else being equal, an average business would be outcompeted if they did something like that.

If you still think what they are doing is efficient, take it further and further. Start increasing the salaries more and more. Very soon you will be able to afford one worker. A very expensive janitor maybe?