It's quite easy really...to retain employees who generate profits for the company...sales people or traders on Wall Street, for example, you quite simply must pay the cash. And why shouldn't you? It is variable pay...more in good times less in bad times.
For all other employees, those in support organizations, you must do two things above all...show genuine appreciation and share their accomplishments with senior management. People want to know their contribution matters and they want to feel important.