If you are looking at smaller companies, there is definitely a tiered system in terms of the complexity and challenges that a company can offer it's development staff. One company's "junior" developer might have the experience to be a "senior" developer at a firm with much simpler problems.
Some people have the stamina that they can just keep solving the same problems over and over again without getting burnt out. I think most people though, will have a tendency to seek out novel or more challenging problems as they grow. Someone working on problems they find too easy will lead quickier to burn out, likewise someone working perpetually on problems that are way above their head can lead to the same.
I have changed firms three times in my career, and each time I sought out a company that was doing something more difficult than the last. With each company, I've come in on the lower-end of the team's skill curve and worked my way up to the upper-end of the skill curve. Then, I got bored, burnt out and moved on to something more difficult.
I started working when I was 18 and I believe I was hired because whilst I still had a really good knowledge of my area (I hope), I was still very cheap to hire £18k per year. This was good for the company I joined as it's a small startup.
I believe that the junior developers my company have hired have all been super eager to impress their bosses and learn new things while still having a huge passion and interest in coding. Whilst we have all been given some time to adjust to our project, we all quickly adjusted and were able to give be benefits very early on. I can't speak for senior developers but these are the main advantages of junior developers.
With regards to relative inexperience of junior developers, I myself have only been coding for a few years now but I have a genuine passion for coding and go home and throw myself into it every night so I believe that I pick myself up there, someone else I work with has been coding since he was 10!! Whilst not having a lot of experience in a professional environment before joining my current company, in the last year or so, I have managed to learn a number of important tools for the job like: mastering linux, built a great knowledge of PHP, built a good knowledge of C, built a great knowledge of JavaScript, built a great knowledge of server administration and last but not least, improved my productivity by at least 10% by mastering vim. It doesn't take long for junior devs to learn this stuff so they're useful to companies.
TLDR; Everyone has something to offer even junior developers.
So you hire out of school, build up a huge intern program and you pay the cost to train and teach. I'm not saying it's the norm, but it's why you do it when you're not just trying to save some money or compress wages further up the food chain.
* Everyone is more motivated and effective when they are being challenged and occupied by their work.
* Mentorship and knowledge-sharing benefits both the receiver and the teacher.
* Over the medium term, junior engineers are less likely to leave.
1. Salary. Your pay will be less than the one of a Senior Developer.
2. Role and tasks. You will, as a junior developer, be taking on tasks better suited for your relatively "non ripe" skills. This doesn't mean that you'll get the short end of the stick. It means that you'll be assinged tasks that fit your current skillset.
3. Experience. While you might be a top-notch developer, you don't have "real-life" experience. Most of the times senior developers have years if not decades of experience on their backs. And with time comes wisdom.
These three things combined are a compelling reason to hire Junior devs for small tasks and projects.
2. not every task is creative, in fact most of them are boring. senior developer gets bored. if you assign a senior engineer to do auto testing, he/she will leave.
3. junior developers work harder. interns work even harder. that's a fact.
For some work, there is a set hourly rate the company can charge. For instance, they may bid a contract $50/h for each developer. In this case, I can pay a mid-level developer 65k/yr with 35k/yr in benefits and overhead, and break even with $0 profit.
If I hire a more junior developer and pay him 50k and train him on the job, I then make 15k in profit and he gets a year of experience.
But there are aren't infinite senior engineers.
In the long-term, this means we need to make more senior developers. In the short-term, we need someone to write some code. Hiring junior developers is the best way to achieve both of those goals.