April 30, 1999 Web posted at: 2:36 p.m. EDT (1836 GMT) by John Stein Monroe

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COLUMBUS, Ohio (IDG) -- With no hope of matching private-sector salaries, states are struggling for innovative ways to attract and retain high-tech employees. That was a sentiment echoed among many state officials attending this week's Intergovernmental Technology Conference.

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Scott Howell (D), a Utah state senator, said states must think "outside the lines" if they want to compete with businesses that lure workers with high salaries, stock options and such fringe benefits as leased luxury cars. States cannot afford to provide employees with BMWs, Howell said. But "as the No. 1 leasing customers, [states] might lease a Toyota Camry to get these people to [work for] government," he said.

A growing number of states, including Kentucky, Michigan and North Carolina, are taking steps to boost information technology workers' salaries, provide incentive bonuses and faster promotions. But state officials admit that they cannot compete with large companies and well-financed startups on these grounds.

"In Research Triangle Park, I don't think we are ever going to be ahead of the curve," said Richard Webb, chief information officer for North Carolina.

Instead, CIOs say, they are looking for alternative ways to retain workers. For example, Kentucky recently approved a new policy to allow state employees to telecommute, hoping such flexibility will appeal to present and potential workers.

Additionally, said Kentucky CIO Aldona Valicenti, state governments have finally begun replacing aging IT systems with more advanced technologies, such as the Internet. "IT people like interesting work, and that is where we've got a chance to compete," Valicenti said.

A state's IT strategy "might not attract people right out of college, but it might attract the mid-level manager who has a family," she said.

Still, state governments should know that organizations across the private sector are facing the same problems, said Manuel Fernandez, chairman of the board and director of Gartner Group Inc., a Stamford, Conn. consulting firm. "You have it in spades, but it is happening everywhere," he said.

John Stein Monroe can be reached at john_monroe@fcw.com.