The labor market is beginning to thaw. HR staff are processing more "voluntary resignations" than they have seen in months. Assume everyone is looking for advancements they have delayed during the Great Recession.
How do you retain the staff that is most valuable to you? Don't just throw cash. While cash always helps, it has the shortest shelf life as a reward. Think intrinsically. Does your staff feel valued? Important? Are their suggestions considered and sometimes implemented? Do they like their work environment and coworkers? Do they find their work rewarding and meaningful?
Improving the intrinsic factors are usually cheaper and have a greater impact on retention than cash alone. Buy everyone a nice, new office chair. Really nice. The chair you buy them is a daily reminder of what you think about them as a person and an employee. You can't spend too much.
Give everyone a training budget to spend as they wish. Online video series? Great. A pile of books? Enjoy. Out of town seminar? Be sure to get a nice dinner while you are away.
These kinds of initiatives should improve morale and productivity while reducing turnover. Your budget should be half of what it would cost you in both cash and opportunity to replace a star performer.
You're going to spend it one way or another, and its a better investment than a boat payment.