Priority number one for 2006, CIOs are warned, is to get retention plans for key IT staff in place quickly: by summer, recruitment is going to become a battleground.

Each year, the National Computing Centre carries out a survey of salaries and employment trends within the UK. The 2006 survey makes depressing reading: staff turnover rates are up; more employers report skills shortages; fewer expect to see their departments grow.

But despite the rise in staff turnover and apparent skills shortages, the survey hardly reflects a labour market in a state of flux. The combination of rising numbers of staff leaving and jobs being hard to fill, should result in wage inflation. Yet NCC reports that IT salary increases lag behind the UK national average. This is more easily understood from a closer examination of NCC's figures. It reports that the average increase in salaries was 3.7% but the median was just a 3.0% rise. That is indicative of a skewed labour market.

"It looks like the dust will begin to settle on the labour market by next summer," says Stefan Foster, MD at NCC's Membership Services. "But watch out, with certain skills such as Internet and intranet development, demand will be high."

In particular, staff with .NET and Java development skills, Windows 2003 Server, and voice over IP skills are much sought after. That is a very specific set of abilities.

"So put your recruitment plans together now – or risk a fight for skilled staff later in the year," says Foster.