Senario:  Season 1 of new league.  My 'prior' year bullpen coach wants to stay with my club but wants a different position.  He wants to move to Bench Coach.

I already have a superior bench coach whom I am rehiring. 

I think there should be an option to offer an improved position (if not the position requested) instead of potentially losing the coach altogether.  Something of a promote from within mentality.

My issue is that if this coach couldn't have the bench coach role, but was offered pitching coach with a sizable raise, would he really turn it down?  Wouldn't loyalty and patience work towards that?  Now I will have to pay an astronomical salary to get him back, as he has some of the best overall (and pitching of course), numbers of potential pitching coaches.

I also think at the end of the season you should have the option of offering your coaches a potential promotion going into the next season which may influence them in staying.

But bench coach is a more prestigious position in the fake coaching community. Your offer of a pitching coach position is still below his expectations.

Also, hiring coaches for the following year could present problems if the fella doing the rehiring doesn't intend to return.

Yes, but that can be said for draft setting, FA pickups etc.  I don't think it should be automatic, but this guy was a bullpen coach with a 78 pitching stat.  I would have loved to offer him the step up for pitching coach as an option.  I think the system could take the other intangibles into account.  Maybe allow the coach to say 'hey I want to stay with a new role of a or b.  not just a, as it is now.  Besides now we hit the most unrealistic part of the game, and thats coaches salaries.  Now I will have to exceptionally overpay someone to get the equivalent stats.  Instead of costing 1.8mil it will likely run me 3.

I hope you don't have to pay 3 million for guy with 78 for pitching.  Why don't you just pay the 1.7 mil for the guy rated 73?

or hire someone from AAA or AA for the ML Pitching coach minimum?

I acknowledge that those are options.  And in a the frame work of the game that is the sensible thing to do.  However, I think an option to counter offer a coaches 'I want to resign but only as a 'blank' coach, should be built into the framework.  Especially if the coach has a high loyalty rating.  Has it is now, its just take it or leave it.