Network professionals still have the upper hand where salary is concerned. 'Golden handcuff' bonuses of up to 50 per cent of salary are failing to retain skilled staff, according to the latest report from Incomes Data Services.
In spite of increasingly extravagant pay structures, average staff turnover was between 15 to 17 per cent in the 23 financial services companies surveyed by the IDS.
The survey identified central Scotland, Edinburgh and the M4 corridor in the Thames Valley as trouble spots for staff retention.
Scottish Amicable, in Stirling, paid a market premium to most of its IT staff. The premium, which the company currently rates as high as 40 per cent, is reviewed and paid quarterly. Scottish Widows also pays a premium of up to 20 per cent of salary for IT staff. Another financial institution, which refused to be named, is paying bonuses worth 50 per cent of salaries.
Norwich Union and the Bank of England review IT staff's pay on a higher scale than their other staff, while Barclays Bank and the Britannia Building Society hold extra reviews for IT staff.
Barclays upped the salaries of 3,000 IT staff last year, with a 10 per cent increase for most, but 15.5 per cent raises for some. The bank still insists that its IT staff turnover rate is 'well below the national average'.
"We found that for many companies the traditional bonus is not always the preferred retention measure. A minority of respondents would not admit to staff retention problems because it starts upping the ante," said a spokesperson for IDS.
Jeremy St John, manager of senior appointments at Elan recruitment agency, noted that infrastructure project managers are enjoying large salary incentives at the moment. While this is drawing in a lot of contract workers it is also helping capable networking staff to progress their careers.
"The city is finding it far more cost effective to guarantee bonuses than risk losing IT staff. Bonuses which are an integrated part of salary are taking the place of discretionary bonuses," St John added.
The report found that the Millennium Bug is only one of the labour market's problems. One respondent blames the skills shortage on the 'traditional' neglect of training and development of IT staff.
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