If good IT work is in high demand as claimed, that shouldn't be a problem. And "we make sure customers don't abuse our staff" should be the baseline of "how do I keep any good employees I might have", not a luxury.
There's a perception among management that they need to remain competitive. The IT service truly isn't a oligopoly like telcos are. My company hasn't increased rates in over 4 years out of fear that we would lose business even though we have more business than we have the resources to handle.