Retention Of Employees In Small Firm

Dear HR professionals,
I\'m working in a small IT firm as a HR executive, where 8-10 employees are working. We\'ve started this company in Jan 2011. But from last 3 months we are in the process of hiring but not finding any good resource for my company. I\'ve hired 2 employees but they left the organization in a month, both have some genuine reason.
Although we are a small company but we take care of employee needs. Benefits we are providing:
1. Five day working.
2. No time limits
3. Occasionally get- together on festivals.
4. Leaves are no issues for employees. (We are not following sandwich policy)
I want to know where we are lacking as I\'m working in a small IT company but we are working on very good projects, dealing with foreign clients only. No politics in office. Timely Increment.
Plz suggest me some points what are the facilities we can provide to employees. How can I help in retention of employees as a HR?

Hi Nisha
It generally happens in Small Firms. Usually for Small firms you won't get any experienced resources. There are many fresher who will show interest to join. While screening and interviewing you should take care of the proper selection procedure and recruit the right candidate.
Even I do work for Small IT firm of 21 Employees and atarted on 2006.
After taking some retention steps we are not facing much attrition since past 18 months
:)

Dear Amit,
We also face the same problem . And we will give all the benefits you have mentioned. but still same thing happens with us. once they get experience they will leaves. it cost high. please suggest something else. Because its a very big problem when i think ever thing is going well , all of a sudden something happened which we can't afford.