Purpose: The purpose of this paper is to investigate the factors relating to retention of employers on an undergraduate work placement programme in a third level institution. Design/methodology/approach: An action research methodology involving problem diagnosis, intervention planning, action and evaluation is employed. The diagnosis involved a survey of 130 employers that had taken students on placement during the first two years of the placement programme. The action research also involved workshops with the work placement team and the making of an intervention with respect to enhancing the placement process through the introduction of a Priority Partner initiative for 26 of the employers. Findings: The survey findings reveal differences in the ranking of importance of college selection criteria by employers, as well the impact of the placement manager's characteristics on the placement process. The intervention findings show that the employer retention percentage increased for the Priority Partners but remained the same for the other employers. Research limitations/implications: The study reports qualitative findings in the context of a placement programme in one institution which limits external validity. Practical implications: Employer retention would seem to be improved with the development of a customer relations management orientation with employers. The role of the placement manager is pivotal to enhancing the retention of employers as is the quality and professionalism of the work placement service. Originality/value: New empirical data extends the very limited understanding of company retention on work placement programmes. (Contains 6 tables and 4 figures.)