Three ways to attract and retain IT talent in 2023 and beyond

The IT labor market has become substantially more competitive in 2021 and 2022, making finding and keeping talent challenging. It's no surprise that the Gartner Global Labor Market Survey repeatedly finds that compensation is the most important factor in attracting and retaining IT talent.

Employees once were satisfied with their pay and perks, but the pandemic and other global events have caused a shift, and many are now looking for new jobs with better compensation packages and more flexibility. CIOs must choose how to solve the skills gap and whether to provide better compensation, benefits, and incentives, as well as training and reskilling to increase retention.

50% of organizations reported raising compensations to retain key employees in response to employment offers these professionals received from other companies in the December 2021 Gartner IT Compensation Increase Poll. Making counteroffers and addressing non-financial issues crucial to keeping IT talent have emerged as essential strategies.

Here are three effective strategies for attracting and retaining IT talent in 2023 and beyond:

Pay competitiveness

The expectations of IT employees are higher than general wage increases and what many CIOs believe is necessary to keep employees and fill the positions.

Leaders must work with HR teams to identify IT roles and skill areas having increased attrition risk and recruitment issues owing to noncompetitive compensation to determine where additional funding will be required to fix pay disparities in the short term.

Organizations with limited funding should prioritize those in roles with high-risk areas when granting raises. Address other human-deal elements crucial for retaining IT talent as well as the financial ones.

Flexible IT compensation strategy

Paying high base salaries to increase compensation competitiveness can be highly expensive because these costs are long-term fixed expenses. Organizations very rarely lower base pay after an increase. Using variable pay components that may be changed or eliminated when market conditions and talent requirements change is one strategy to reduce the number of compensation modifications locked in as long-term fixed expenses.

The most popular method for attracting and keeping IT professionals with in-demand abilities is skill-based premium pay, which is typically 10% to 12.5% more of the base salary. Employees must continue to perform well to receive it. One benefit of premium pay is that it can be flexible and adjusted as business requirements and market circumstances change. Additionally, signing bonuses encourage applicants to accept a job offer. The most typical payment arrangement is a lump sum made upon hire; however, some companies divide this into two payments, one made at hire and the second installment paid a year later. Lastly, retention bonuses can encourage IT talent with crucial abilities to stay with their organization for a predetermined time, such as during a significant digital transformation project. Only a small portion of the workforce is eligible due to the strict requirements of these premium pays, which can be cash, stock, or a mix of both.

Effective pay communication strategy

HR needs to clarify what managers should expect during structured pay conversations. An effective pay communication strategy is a formidable instrument to inform, engage, and retain critical talent during high turnover in competitive labor markets. Pay is a delicate subject. Be sympathetic while discussing facts and help employees understand and appreciate their pay. Give specifics about base salary and the total worth of an employee's benefits package, which may include bonuses, benefits, and well-being programs. Prepare yourself to discuss the limitations of self-reported public pay statistics and be honest and transparent about the sources your organization uses to determine compensation. This will enable you to respond to questions concerning publicly disclosed compensation figures.