I realize this is controversial and might not make business sense, but one humane policy would be to give your senior developers tenure and then never fire them for any reason. It would greatly reduce their stress levels. Also it would reduce the chance they'd seek another job.
The EU system is generally that you can't just "fire" people, you have to have a reason: either documented underperformance or misconduct. You can make redundancies by eliminating positions, but again this is subject to consultation and fairness rules.
If they did this company would be much,, much slower at hiring people and wouldn't bring people on till they knew they could always pay them. It would slow down company growth a huge amount. I doubt this will ever be a thing at least in the US.
Well making it illegal is less humane to business owners and goes against the concept of property rights. Who owns your business and sets policy, you or the government?
Tenure might make business sense because it would give employees a great incentive to not leave for positions at other companies.
For a product company, perhaps this would make sense (de facto if not de jure) for "the R&D department".
For a consulting shop, tenure sounds a lot like "making partner". Personally I would like to see more development consultancies adopt a partner/associates model.
Toyota had a policy of not laying-off permanent employees for many decades after layoffs during the 50s (see e.g. [1] and the "Toyota Way" books). It is perhaps interesting to consider how this fits with some of the other ways that Toyota is run. E.g. Toyota has a culture of continuous improvement and elimination of waste in processes -- and it is very likely that employees will be more far more receptive regarding initiatives that could automate away or eliminate some or all of their work if they know that they will still retain their jobs.
Intermediate solution: you could just buy them unemployment insurance. Or write into their contract a much longer paid notice period. This is more common with executive-level staff, who are difficult to get rid of without a "golden parachute".
Well certainly it's in the back of a lot of people's minds. Performance reviews, stack ranking, layoffs to maximize corporate profit, and such. Tenure would be a huge incentive for people to work and stay employed there. I suppose it's too radical for any company to actually make it a policy.
In my neck of the woods, there are so many software jobs, that only those worried about ageism (a real problem), or those with increasingly irrelevant skills may be worried about work.
It's still a problem if your social world, project goals, skill-set goals, personal finances, or daily routines go into turmoil because some executive or middle manager decided to let you go for whatever reason. Even if it never happens, the possibility of it is stressful to some people.
I know that the possibility of job loss is stressful to me. Only a year or so ago I was only making a third what I do now, and I'm not even making 6 figures now. I can hardly bear the thought of having to go back to making so little, or even worse making nothing and not finding a job.
Mix in not having a degree and my spouse being saddled with a pile of student loans just out of school and you can probably see why.
