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Councils have increased fringe benefits for IT staff in an attempt to make up some of the shortfall between public and private sector salaries.
However, salaries for ICT staff in local authorities continue to fall well short of those in the rest of the industry, according to Socitm's annual pay survey.
Andy Roberts, chairman of Socitm's Membership Group, said councils have to increase top line pay rates to stop staff being poached by the private sector.
"In most disciplines, local authorities compete with each other for staff, but in ICT we compete directly with the private sector, and salaries must reflect that fact."
"At a time when staff turnover is rising, we need to focus on the headline salary. If not, we are going to have real problems recruiting and retaining quality staff, especially when the economy picks up and the private sector widens its recruitment," Roberts said.
Despite the tight job market in the private sector, Socitm's survey found a significant increase in ICT staff turnover at local authorities in the past year.
Socitm said that in a bid to retain staff, 92% of local authorities are offering flexible working hours. Some 25% plan to increase opportunities for home working in the next year, while 85% offer job sharing.
More than 70% of local authorities have a structured training and development plan for all staff, the survey found, while a small number also offer bonuses to staff to meet targets.
The survey covers more than 5,000 staff, seven job levels, five job functions, and a total of 105 key skills at a third of local councils. The full survey results are being distributed among Socitm members.