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It seems like it is becoming increasingly difficult to retain employees in the IT world these days. I started talking to co-workers and friends about this and came up with 10 things to do that will surely keep your employees happy so that they stay put!

1) Perform annual reviews on time - this means ON or before their anniversary date. Nothing makes an employee feel de-valued more than wondering what management thinks of their performance (and not getting a raise)
2) Flexible work schedules - now I know a lot of people will disagree with this but why have IT people in the office all the time. With broadband access available almost anywhere, there is no reason not to give some "work from home" time (as long as their performance warrants it).
3) Find out what type of compensation motivates them - this is probably the most important one of all. Some people like money, some like praise and promotion, some like the R&D work, some like time off, etc. Sit down with each one of your employees and find out what they want! (What a concept!)
4) Use an agile process for IT - this doesn't necessarily mean THE agile methodology but a process for IT projects that doesn't suck the life out of people by putting too much red tape in place.
5) Provide company sponsored "outside" activities - employees love to be given time outside of work with the team to blow off steam. This can be as simple as a round of golf or an early happy hour.
6) Give them input and use it - if employees give input on projects and are ignored, you might as well be telling them that they SUCK! Of course, it has to be relevant input.
7) Bonuses - this one could really be covered by the compensation point above but everyone loves money! If they are doing a good job they are enabling your company to make money so share the wealth.
8) 40 hour work weeks - this is a big one! There are always times when you will need to have staff available beyond the normal 40 hour work week but if it is consistent, you have a project management problem and possibly an employee morale problem. If you don't have the latter, you will soon.
9) Good hardware - don't be a cheap ass! Give your employees the latest and greatest when it comes to computer hardware. It makes the work more enjoyable to be using a kick ass machine and it just might make them a bit more productive.
10) Cross training - don't create silos in your work environment. Nothing will de-motivate an employee more than doing the same thing every single day. Let people move around a bit in the projects. If you have your project management done correctly, this should be pretty easy to do. This also is a HUGE advantage to your organization if you start to have turn-over.

The bottom line here is that if you don't show, with action, that you value your employees they are going to become unhappy at some point and leave (even the good ones). Your employees keep your business running so if they are not happy you have nothing to make your customers happy.