Staff retention has reached its worst level for 15 years, the CMI said. Its survey found that 45% of employers were having difficulty holding on to key staff.
Growing retention problems are forcing employers to offer staff perks such as bonuses, life assurance and medical insurance, the survey of 20,000 staff, including 2,560 IT staff, revealed.
IT suppliers and service companies gave annual bonuses to 80% of their staff in the year to January 2005. Utilities was the only sector to offer bonuses to a higher percentage of employees.
Total annual earnings for IT employees rose by 7.1%, with salaries up 4.8% to an average of 41,960. This was higher than the average pay rise of 4.3%. Nearly all IT employers offer staff private medical insurance, 20% pay for dental care, and 67% provide life cover worth up to four times annual salary.
However, the research suggested that employers may be making a mistake by assuming that money and perks alone will keep staff in their jobs.
Seventy five per cent of organisations questioned admitted that staff left their jobs because they were offered little in the way of career progression or training.
"The biggest issue is that people have always assumed that money is the answer - increasing people's pay packets. But in IT people recognise they are only as good as the last job they have done. They are saying, 'If you want to keep us, train us'," said , CMI spokesman Mike Petrook.
Changes in company law will force employees to consider staff development much more carefully in the future, said Petrook. The Operating and Financial Review requires businesses to show how they are developing their staff, as well as the company balance sheet.
It is likely to encourage more firms to offer IT staff study days to brush-up their skills, in addition to their annual holidays. Last year, IT suppliers offered staff an average of 7.4 study days, up from 7.1% last year.
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