It isn't all about the money. This may be obvious, but when employees leave, most managers offer them more money. Because it is the easiest fix, or at least they think it is. In today's fast-paced technology companies, compensation is important, but employees leave for a variety of reasons. Understanding these reasons can give you great insight into your group's dynamics and fundamentally help build a great company.
Managers often perform poorly because they are completely untrained.
It's really, really hard to invest in something strategic but not urgent like training your managers, but remember it's one of two things that you can do to improve long-term retention. Developing the right managers begins with the interview process. It is important to hire people into positions they can handle and to make sure that managers actually want to be managers. Once a manager is in place, training is a necessity. Each manager has a different style and some gel better with a company's environment than others.