Penelope Trunk has it totally right.

Trying to Keep Young People From Quitting? Keep in mind that training doesn’t have to cost your company a cent. Young people place enormous value on mentoring. They want constant feedback. Offer structured, constant feedback in place of salary increases and promotions. If the mentoring is good, the lack of promotion won’t be a sticking point.

I wrote before on how to maintain these, here and here.