Very little scope to increase wages is driving fears over a loss of top IT talent from businesses, according to research from Modis International, a global leader in IT recruitment.

Despite a challenging jobs market, nearly a half (43 per cent) of IT decision makers say that holding on to their best talent has been a real struggle in the past year, and is likely to become more of an issue in the short term.

The research shows that many IT leaders are unable to pay staff higher wages in the current economic climate, with only 6 per cent of respondents reporting that they increased salaries in 2010 and intend to do so this year.

Instead of more pay, IT leaders are turning to alternative ways to hold on to their top people. Offers of better career development and work-life balance are increasing in popularity over traditional benefits like bonuses and additional paid leave. Just 13 per cent offered bonuses last year or intend to introduce them this year; while a mere four per cent offered unpaid leave or plan to do so in the near future.

Training is seen as a key priority by IT leaders, with one fifth (21 per cent) offering development opportunities and the chance to learn new skills, while the same proportion view career planning programmes as a major driver of employee morale. Just over a quarter (27 per cent) also say they have introduced more flexible working options above and beyond legal obligations to increase motivation.

Jim Albert, Managing Director, Modis said “In the current climate, many companies are finding that it simply isn’t viable to increase wages, so IT leaders are being pushed to find innovative ways of retaining their top people. Training courses and flexible working hours are two examples of cost-effective measures that can be taken to increase morale amongst existing IT employees.

We’re seeing companies increasingly invest in activities outside the ‘day job,’ offering opportunities for employees to learn new skills and develop their careers. These measures go beyond financial rewards and offer additional value for both the employee and the employer. Better trained, happier staff strengthens the business, as well as supporting individuals’ career aspirations.

“In a business critical function like IT, it is imperative that employers focus on retaining the best people who can really drive change and make IT deliver the best returns for the business. The best IT professionals who exhibit these skills are in high demand, and as a consequence, businesses have to work ever harder to retain their top talent.”