When the larger companies have to cut costs and eliminate their bench, the smaller companies become the farm system for those larger companies.  Investing in talent and people is imperative to being successful in business.  It's equally important to run the company effectively and profitable.  Often times these things do not go hand in hand. 

Smaller companies need to invest in ways of building and keeping their key people.  Almost as if they are making an offering to the radio gods, they hand over their big prospects only to have to start over again and hope they can get a little more time out of the replacement.  This is life. Yet, if they perhaps tried a little harder to maintain these people before they got the offer from the larger companies, they might be surprised how loyal that person might be. 

Smaller guys....don't wait till your key employee gets the offer to suddenly express to them how awesome you think they are.  It's too late. It's like saying "I love you" back to the girl 30 minutes after she said those words to you. The feeling and the moment have passed.  Building loyalty in employees is easy.  Everyone, deep down, wants to be a "company guy", but more often than not, we all become guns for hire. Offering ourselves up to the highest bidder with room for additional growth.

This is reality.  Companies need to do a gut check sometimes.  Is the amount of stunted momentum from when they leave-worth the amount of money you need to pay in order to keep key employees from being poached?  I don't know the answer to that.  What I do know is that I have worked for 3 companies in the last 13 years (currently working at the 3rd).  With those first two companies I worked hard, shot up the ranks and considered myself a "company guy".  My loyalty was always there and I left those companies on great terms.  They both told me how valuable and awesome I was to the company as then watched me walk out the door.  Perhaps waiting till I packed up my office to tell me was a bad idea?

Evaluate your people.  If they are stars, let them know.  Nothing bad will ever come with telling someone they are doing a great job-when they are actually doing a great job.  Waiting till the end of a contract or when another company offers them something terrific is not the way to invest in people.