This is largely common sense, but I’d bet there’s a large number of IT shops out there that haven’t picked up on this yet.
Do you want to keep the best people on your staff?
Make sure you have career paths for them. If there aren’t clear avenues for people to be promoted or advance, it means they will be forced to look outside your organization to move up. Those who are talented or work agressively to advance will be forced to leave as they become more skilled.
If you are in an industry where prior domain knowledge is prized during the hiring process, that also means you will likely lose them to your competitor. Ouch.