"There is no loyalty in Silicon Valley"
This is a quote from one of my mentors. He was experiencing the same problem many of us have faced. Real talent and hustle is in high demand and companies are competing like crazy to get it.
What you, the boss, are asking:
If company X down the street is offering a 20% raise and a fancier title why wouldn't your most talented team members jump ship?
NOTE: I hate the term boss. "Bosses" suck, "leaders" are amazing.
What your team members are asking:
What is the difference between sitting in a pale grey cubicle working for your company and sitting in a pale blue cubicle working for another company with a marginal salary bump?
If everyone else is running one way, I suggest you do the opposite.
If every other company is compensating their employees with cash give them something cash can not buy.
A while ago one of my friends working a 9-5 job purchased a large screen television. Time passed and he saw an ad for a TV 4 inches bigger. Since he had no higher goal for his resources he upgraded. I couldn't even tell the difference. When there is no higher value, focusing on the small marginal value seems like a good choice.
That is where you as the 'leader' are responsible for providing compensation to your team that is more valuable than just financial. Then the question becomes...
What is worth more than money:
Give them a reason to get out of bed early. Give them a reason not to go out and get blitzed. You can do this by aligning your goals.
Most likely what I mean by aligning your goals is not what you think I mean. I am not talking about commission or profit sharing though those are powerful tools.
The Boss might think the Employees goals must align with their goals.
A Leader will make the Team Members goals align with their own.
Freedom to pick when and where they work. How they work and on what they work on. Tethering people down and expecting them not to behave like a lion taken from the wild and stuck in a cage. Just as the lion will begin to mindlessly graze around their cage staring at the window wishing they were free your employees will graze mindlessly around the office and stare and videos on youtube wishing they were free to.
Make your company interesting. If you have no culture then on a day to day basis what is the difference to your team members on if they sit in a dull grey cubicle in your office or a cubicle at another company?
Everyone wants to belong. Everyone wants to be a part of something. People are happier when they are involved in a community with people that they trust and respect. In the book, I will cover a tactic I stole from my old Montessori. It invloves removing all cubicles and bringing teams together around a table which streamlines communication (no more passive aggressive emails or forgetting to cc team members).
Actually, I am NOT talking about equity. I am talking about ownership of their domain.
When I coach gymnastics if I have a student that can't stay in line for their turn I could sit them down next to me. But the second I take my eye off of them they are going to be back at it.
Instead, I try something else. I put them in charge of the line "Can you lead us over to the foam pit?" You would be amazed what someone will do if you give them ownership of even the smallest piece of the puzzle.
How this applies in business: Allow them to take ownership of the product. Instead of mindlessly building a product based on mandates printed on a piece of paper handed down from middle management empower each team member to take ownership of the product in their own way.
Sounds scary I know, but I'll cover strategies on creating fail safes in the book. I even cover how from day one of a junior level team member can take ownership.
Creating this value doesn't happen without you, the leader. As the leader you are responsible for creating this intangible value. You need to let your current team and potential hires know about it.
List out the value you provide on every description of the position internally and externally. Externally this showcases the added non tangable value you compensate your employees with.
Hint: you don't need to list different ones for each position. Just write it once and copy and paste.
Create signs and post them up around the office: "Dogs welcome" or "Office Hours: Your choice AM to whenever you want PM". Internally this servers as a constant reminder to your team and everyone who visits of the value they are reciving by working with you.
Do not hide the fact that you won't compete with other companies on salaries. Instead, showcase the value that they can't provide. You will be amazed at the quality and loyalty of your team.