All-but-one of the positions I have held along my career have been through word of mouth.
I think the best place to find senior software developers is to ask other developers. And if there is a little financial incentive, that would be nice too... and it would be a lot cheaper than using a recruitment firm.
One of the other possibilities is to make it an easy option for developers to move around within the company. Several places I have worked it was far easier to take a new job at a different company — often involving a promotion in the process — than to try to transfer within the company. (And an "in place" promotion? Few and far between.) And that's unfortunate.
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