What benefits do faculty members get by supervising PhD students?
What happens if a faculty member with many years of experience has never supervised a PhD student, but has supervised many masters and undergraduate students? Does this faculty member lose some benefits?
Note: Academic positions vary in the expectations for the role, and some academic positions do not include an expected supervision component (e.g., at some teaching schools with small or no PhD program). I will assume you are taking about an academic at a school that has a PhD program, in a role where there is a supervision component.
There are a number of benefits to supervising PhD students, and it can be a rewarding relationship in good cases. As a starting point, PhD supervision is part of the academic duties of an academic, so just as with teaching responsibilities, failure to supervise PhD students would count against the academic insofar as they are not performing one of their expected duties. Aside from this basic necessity, there are three main benefits to supervising PhD students:
One benefit from supervision ---which depends a lot on the quality of the student--- is that the academic will probably be able to generate joint publications with the student, which counts towards the research output of the academic. Publications undertaken by a PhD student are often supervised by their supervisor or broader academic panel, and it is usual for this to lead to co-authored publications. Since the student does most of the "legwork" on these publications, the supervision role is usually a smaller role, but it often leads to co-authorship (depending on the contribution).
Another benefit from supervision of PhD students is that ---as with other teaching roles--- it helps the academic learn/solidify teaching and management skills. Supervision of a PhD candidate involves deep-level one-on-one teaching and supervision of a research project, plus general assistance with management of the student. These are all good skills to learn for a starting academic, and are useful practice for more experienced academics. Supervision of graduate students is one of the early ways that academics gain general management experience.
Another benefit from supervision is that it acts as a marker of seniority and experience. Academics who have successfully supervised several PhD students (who have graduated successfully) demonstrate they are experienced in the field and have a track-record of successfully training new researchers. Supervisors often act as references for future job applications for successful PhD graduates, and this also acts as a marker for seniority. This is inherently beneficial for an academic career, insofar as it demonstrates supervision and managerial experience. (It is a bit like with other jobs, where management responsibilities and supervision over a team is used as a marker of seniority and experience.)
Finally, an important ---but sometimes overlooked--- benefit of PhD supervision is that it is psychologically rewarding to pass on your own research skills and help another person become trained to a level where they can work unsupervised in an academic capacity. Supervisors usually form a good bond with their graduate students, and it is a lovely feeling to see your own students successfully publish papers, get their PhD, and (hopefully) go on to a rewarding career.
With regard to your second question, if an academic spent many years in the field and didn't supervise any PhD students, it would make it hard for that academic to advance their career. Failure to supervise PhD students would probably be an issue in annual performance reviews (unless the school doesn't have a PhD program to supervise or this is not part of the role) and it would be a deficiency on an academic CV when applying for positions at mid-to-high academic levels. An entry-level academic is not expected to have supervised graduate students, but most mid-to-high level academic roles expect evidence of supervision experience, including successful supervision of PhD students.
At an American research university, supervising graduate student research is a significant part of a professor's job (especially in the sciences). Not working with graduate students will hurt a faculty member's job evaluations, just as would not publishing enough research or getting teaching evaluations. How many graduate students is an appropriate number can still depend a lot of the institution and the specific field.
Usually, graduate student supervision will be part of a holistic evaluation of how well a faculty member is doing. However, there may sometimes be specific requirements—such as, in my department a faculty member cannot be promoted to the rank of full professor without being the primary supervisor for at least one Ph. D. graduate. More generally, when faculty members are up for tenure or promotion, quite a bit of attention is paid to whether they have worked with or are working with graduate students. Masters students are certainly worth something in this regard, but not nearly as much as doctoral students. Similarly, when it comes time to be evaluated for merit raises, among the evaluation criteria are whether a professor is successful in advising Ph. D. students.
For faculty who do not show a record of involvement in graduate student training, this will count against them. Since supervising graduate students is a part of a professor's teaching responsibility, if someone rarely or never works with graduate students, they may be assigned a heavier load of classroom teaching to make up for that absence.
Faculty members usually supervise PhD students because they have to. Usually faculty memebers apply for projects, projects carry money to the faculty members and their departments, but faculty members are too expensive to perform all the duties paid by projects. In fact PhDs carry on the most menial tasks in research, effectively concretizing the ideas and testing the concepts developed by the faculty member, ideally developing some sort of independence along the time spent doing this tasks.
PhDs therefore provides:
These things are delivered even by the worst PhD, even by a PhD quitting after a couple of years. Because the PhD is spread over 3 (or 5) years, how effectively these things are delivered are "just" a matter of planning by the supervisor.
Supervising master/undergraduate students you obtain an infinitesimal fraction of the benefits above listed, because they are not committed full-time nor for a long span of time, as a PhD student.
Certainly in biology, it is PhD student who, under the supervision of a faculty member, conduct research. Faculty have little time for experimental research themselves. Faculty have classes to prepare and teach, committees to attend, admin roles to fulfil, grants to write, paper to review and more. Experiments can take days of fully focused attention, and faculty members just don't have this time. I'm lucky if i have 2 or 3 clear days in a month, and then not together.
Think of a faculty member as the CEO of a research organisation, and the PhD student and postdocs as the employees of this research organisation. The faculty member provides the strategic direction, advises and trains the workers and provides the funding. The PhD students and postdocs do the experiments and analyse the results.
Depending on the country, it may be a requirement for the faculty member to actually get their title.
This may for instance be a requirement for "advanced PhD" (a title in some European countries that formally makes you an independent researcher), or a professor title (as opposed to "position").
