IT staffing salaries will increase by as much as 10% to 15% over the next three years, according to a new forecast from Meta Group. These higher wages will devour an even bigger portion of the overall IT budget, with labor costs accounting for more than 55% of an organization's IT spending by 2007.
What's driving the raises is increased competition for talent, which means that now is the time to start paying attention to retention. "As the economy heats up, so does the desire and incentive to seek higher-paying work and greater development opportunities," says Maria Schafer, senior program director with Meta Group.
This is especially true of IT, Schafer notes, because the industry has suffered through one of the longest periods of job and salary stagnation. "CIOs must tackle this issue immediately, using a variety of tools to compete with competitor firms - or face a real workforce crisis in the months to come," she says.
To keep your staff from seeking greener pastures with other employers, Meta says IT leaders must pay closer attention to human capital management programs. Such initiatives include management development, employee welfare/morale programs, recruiting/retention programs, and compensation tools such as performance-based incentives. It's also important to offer more flexibility for staffers through programs such as job sharing and flexible work hours.
Meta's 2004 IT Staffing and Compensation Guide finds that turnover is particular high for those with much-needed application development, security and networking skills. Of those polled, 24% said that IT pros in the application development arena were the most difficult IT employees to retain. And 13% of respondents separately identified high turnover among workers who possess security and networking skills.