This thesis is about retention of software development employees in the IT industry in Taiwan. It is noted that the loss of software development employees not only involves the costs of a departing employee, but also involves loss of knowledge, social capital and company memory which may cause IT companies to fail. This is because IT companies'' tacit knowledge gained from experience and know-how may not be passed on from senior workers to junior workers. In addition, there are two research background problems identified for this study, which are a decreasing core workforce resulting from the aging population, and insufficient software development employees resulting from Taiwan''s education system. Both factors make the study significant, as software development employees are a key source of profit, skill and sustainable competitive advantage for IT companies. Therefore, the aim of this thesis is to identify what retention factors are important in retaining software development employees in the IT industry in Taiwan.