3)Bring Back Bonuses and Other Benefits

Retention wasn't a problem post 2000 when IT budgets were tightened everywhere. "The job market was so bad that CIOs said: 'Nobody's going to go looking around'," says Kate Kaiser, the Marquette University associate professor who led the SIM study. That's no longer true. For example, CIO's sister publication Computerworld recently completed its "2006 Salary Survey", and, according to the report, close to 400 "respondents were confident when it came to job stability which is in stark contrast to the widespread uncertainly that dominated the ICT industry in 2003". The report states that "the job market has made a full recovery with redundancies no longer a problem". A healthy job market is bad news for CIOs who aren't working to retain their best and brightest.

"Incentives, special compensation programs and signing bonuses are more of a requirement today," says Szygenda, who finds himself offering more money to attract and retain employees. "We didn't have to do any of that a few years ago."

GM declined to elaborate on its compensation tactics. However, average IT compensation will rise 4 percent this year, according to Forrester. But salary increases can vary wildly from job to job. Workers in roles vulnerable to automation or outsourcing, such as call centre, applications maintenance and technical support, may actually see their pay decline, says Forrester. Those with skills in service-oriented architecture, business process reengineering and project management, where demand for workers outstrips supply, will see double-digit salary growth.

Not everyone has money to throw at the problem. Larry Bonfante, CIO of the US Tennis Association, a $US220 million non-profit, vies for talent with Manhattan's financial services firms. "JP Morgan is a half-hour train ride away, and they pay twice as much," says Bonfante. To compete, he plays up the excitement surrounding the USTA and its collegial atmosphere. "We try to create a context that people find more attractive."

His most valuable perk? Flexibility. "We don't chew people up and spit them out like the financial services industry," says Bonfante. "That's compelling to a lot of people." It's how he attracted two of his best directors, both women with small children. "We allow people to work from home and provide flexible hours for many staff," says Bonfante. "I'm not a clock watcher. I'm interested in results. If you have to leave early to go to a ballet recital, God bless."

A third of IT workers said they value a flexible work schedule more than other non-traditional benefits, according to the "2006 Compensation and Benefits Report" by Hudson Highland Group. "Employees are more willing to forgo additional cash in order to have a more improved work-life balance," says Peg Buchenroth, Hudson Highland Group's managing director of compensation and benefits.

Flextime is also the most common benefit used to motivate or retain IT workers, according to CIO's staffing survey, with 61 percent of organizations employing it.

4)Get Creative About Training

Another benefit IT professionals value is job-related training, according to the Hudson report. But training budgets got slashed during when IT budgets were cut, and bringing them back remains challenging. Some CIOs have coped by finding creative ways to fund training.

Connecticut CIO Wallace needed business-savvy staff with good communication and negotiation skills to market IT-business solutions to internal customers. To cultivate these talents in-house, she sacrificed an upgrade to her project management software and funnelled that $US11,000 into a customized four-day training program developed with a local university. "We can upgrade the application next year," says Wallace. "What good is a software upgrade anyway, if you don't have the right skills to pull it off?"

CIO Alan Boehme takes a different tack at Juniper Networks, a router manufacturer that competes with the likes of Cisco. Boehme tracks all the money IT generates or saves the business and reinvests a percentage in professional development, such as funding staff training at the Project Management Institute. "We make the case that a portion be used in IT for training and education in order for us to become more operationally proficient and able to deliver future benefits to the business faster," he says.

Others take a do-it-yourself approach. Harrah's CIO Tim Stanley came from companies that valued training and offered robust corporate programs. At the gaming giant, he developed his own program to cover business and technical subjects ranging from finance to data architecture. The program was developed by in-house staff who had subject area expertise and some background in training.

For advanced training, he's called on his vendors to help by building into their contracts a number of prepaid training hours. But Stanley insists vendors do it onsite and within the context of Harrah's systems. He also works with other third parties to offer online certifications for his staff.