Indie Game Developer trying to hold on to new Programmer employees:

Q. Any thoughts on where to attract some programmers with UDK experience from and most importantly how to keep them, so far all our efforts got us one permanent member, and the rest would either commit but shortly after drop out due to various reasons or never actually be available right after coming on board. I understand that programming is a discipline experts in which are in big demand in the industry and no one chooses to work for free over paid positions even if they like the project

A) I would say that your problem is simple; people would like to work on your project but cannot commit to it full time -or commit then leave because something better or better paid comes along. 
So what's the solution. 
To my mind there are 2. 

1) Find a pool of UDK programmers who need a experience and some investment in their future- but cannot work full time. That probably sounds stupid- but the answer is invariably Students. Find a University or College (it doesn't have to be on your doorstep- you just need to establish a relationship with them) where students study UDK. Speak to them as if they were investors. Do they like the project? Do they want to be involved? How much time can they commit to each week, as a group? Create their financial/reward package. 
What will they get for all their time as a % of profits. 
If its 10% -make them (as a group) 10% shareholders in a separate company that owns the rights to the game. 
Chances are that if the game is a success they'll come and join you when they finish their Degrees because they already have an interest in your success. 

2) Offer a small company shareholding to new recruits once they have been with you for a year. The shares should state that they cannot be sold thereafter until the employee has completed another two years with the company. 
That way they are given an incentive to make the company a success and are tied into long term company commitment. If they leave before completing 2 years the shares are worthless. 

You will notice from this that the idea of nurturing and retaining these employees is a long term strategy for both of you. But its something you should bear in mind. 

Finally the other form of retention that I haven't mentioned is Promotion. 
If you find a suitable employee, tell them about the future of the company, where it will be in the next year or so, what the companies ambitions are... and most importantly what the new employees ambition should be going forward with the company. 
eg: " As the company grows we expect that we will need a Supervisor for each process/stage in the development of the games, a Studio Manager- perhaps even a Studio Director (with a company shareholding). What are your ambitions and skills." 

Make an employee feel that they are part of the company. Part of its future, not just its present. ALWAYS be confidant around employees about what your company WILL achieve, with or without them.

John Armstrong