Most companies are having to pay more to hire and keep IT pros. But just how much more depends in large part on one factor: 

Where the business is located.

That’s the message in the most recent salary survey released by IT job board Dice.com.

In 2012, average IT salaries rose 5.3% compared to 2011. And IT pros at all levels saw their pay rise in 2012. Lower-level tech staff saw the biggest gains, with an average IT salary jump of 8% for technology pros with two or fewer years of experience. Those with 15 or more years of experience weren’t as fortunate, but still saw a 4% gain.

But that doesn’t mean IT salaries increased by such a high number for everyone. One of the biggest factors determining how wages changed, according to Dice’s report: geographic location.

Much of the average gain was heavily influenced by several markets that saw double digit increases in IT salaries:

• Pittsburgh (IT pros there earned 18% more, on average, compared to the previous year)
• San Diego (13%)
• St. Louis (13%)
• Phoenix (12%)
• Cleveland (11%)
• Milwaukee (10%)
• Orlando (10%)

IT pros in other markets saw their pay remain more steady, or even earned less in some cases. Silicon Valley, for example, saw an average IT salary decrease of 2.8%. However, that remains the only market in which tech employees earn over $100,000 a year, on average.

IT salary rise creates retention challenge

While’s Dice’s IT salary report brings good news for tech employees, it’s bad news for CFOs at the companies that want to find and keep top IT talent. It’ll continue to get harder and more expensive to do that as competitors offer more money to lure employees away.

Among those who reported earning a higher salary last year, nearly 20% of employees did so by changing employers. And 64% of IT pros are confident they could find a better job this year.

Here are some steps organizations can take to improve IT recruiting and retention:

• Review compensation plans to make sure they’re in line with the company’s geographic market and the overall IT job market
• Consider what low- or no-cost benefits can be offered to staff and applicants — for example, flexible scheduling and telecommuting options, and
• Offer more IT skills training opportunities — that’s one benefit IT pros want from their employers, and it will help companies close critical skills gaps without hiring new staff members.

Tags: Dice.com, IT jobs, IT salaries