Keeping young employees is no simple task. There are organizations dedicated to this (see YPM for one really good one), and there are studies dedicated to this, and there are no simple answers.

A few thoughts though:
1) Offer more opportunities to those who crave it and don't reward fogeyism or people who just "hang in there." Meritocracy rules! The military is TERRIBLE about fogeyism. The longer you're in, the more you get paid. You cannot reach a certain rank until you serve a certain amount of time in a particular job classification. Some would call this rewarding the loyal, but I would call it a MAJOR demotivator.

2) Offer ability for some to stay at a post for longer than the prescribed time, and give a pay raise to those who go where others don't want to go. Yeah, it's not all about the money, but if you're sending me to some desolate Arctic Circle post, you better pay me more.

3) Ask those who stay in why they stay in, ask those who leave why they leave and make some changes if you think it fits your culture. If someone leaves the Marine Corps because they don't like the discipline or the uniforms, stop chasing this person. This goes against the core culture of your organization. But if somebody leaves because they didn't get something that they should have, find out early, and make it right. BEFORE they leave, preferably, not a last ditch gasp.

4) Pay people equitably. Granted, those who are in sales bring in the dough, so they should get paid more, but if the gap in pay between your CEO, your top sales guy, and your lowest employee is like 400%, you've got something wrong in your compenstation structure.

5) Don't be afraid to take risks, and reward those who fail. Too often, we see younger employees afraid to "take the shot" for fear of screwing up and costing the company money. Set aside money in the budget for some (not a ton) of calculated risk taking, and encourage managers to spend it. REWARD managers who spend it would be even better, especially if the 1 failure leads to 1 HUGE idea.

Not easy, to be sure, but these are a few simple ways companies can attract and retain their younger leaders. I'm sure there are other ways, and I'd love to hear them, because as a manager, I'm always looking for an edge to keep the best and brightest on my team.

I will talk the other way round.Should we dispense with people after a certain age though they can deliver.Keeping the youngs is another matter.

Hear it? Young,young, young?? One track mind to an unwinnable lawsuit for age bias...been there, done that. That's why the "young" culture is taking over the fast track. INSTANT GRATIFICATION takes too long. The smartest guys in room happen to be the youngest (and the greediest) while the oldest happen to be working late, again.
While taking yet another job interview, yet another peach fuzz Vice President, looked at me and said, ("GULP, you're qualfied for MY job!!) no kidding.
" Why, you're way "overqualified" for this position, SIR." (illegal, but whose counting at this stage of my life), so I quipped with nothing to lose - " and what part of my experience would you like me to forget??"

It's not illegal to tell someone they're overqualified, nor is it illegal to not hire someone who is overqualified.

I wonder how many of these officers are staying in military service but option for the private sector. Many military personnel are taking jobs in Iraq with private sector security companies. These companies perform tasks like, training the Iraqi military, guarding officials, guarding convoys, assisting in raids on insurgents and logistical support. As private sector "consultants," ex-military officers and Special Forces can earn two to ten times what they earned as in the military. They also can exclude the first $80,000 from US income tax. That seems like quite a financial incentive to leave the army.

More officers think Rumsfeld is the problem. See New York Times article from today.