According to the 2003 IT Staffing and Compensation Guide, an annual report released by META Group, Inc., 61 percent of IT managers indicate that IT compensation consumes from 25 to 50 percent of their budgets, even though IT budgets have decreased or remained flat this year.

Last year, only 40 percent of IT managers claimed this same range, proving that IT salaries continue to have staying power despite the economy. While IT salaries continue to rise, the rate of increase is holding steady with last year, averaging 5 percent for base salaries, though a few job categories requiring hot skills continue to see increases of 8 to 10 percent depending on the skill. In addition, even more respondents than last year predict an increase in the IT compensation budget during the next year 26 percent of all respondents in 2003 compared with 22 percent last year.

"There is little question that IT budgets will continue to decline slightly or remain flat this year," says Maria Schafer, program director of META Group's Human Capital Management Service and author of its annual IT Staffing and Compensation Guide. "What is most interesting is the fact that, despite this, we expect IT compensation to actually rise, in some cases at the expense of non- IT employees."

In fact, the overwhelming majority of firms continue to pay IT employees higher salaries than their non-technical counterparts, and the number of companies doing so has increased again, with 75% of respondents indicating this, compared to 67 percent last year. This percentage is getting close to the historic high of 2000, in which 80 percent of respondents reported paying higher salaries to IT employees. This compensation imbalance can be partially attributed to the overall need to retain key IT staff.

The top method of employee retention remains the monetary reward, or cash bonus. According to the guide, 54 percent of respondents are still offering IT employees an annual year-end bonus, while a surprising 44 percent are using sign-on bonuses as a means to attract higher-level IT employees.

For more information about META Group's 2003 IT Staffing and Compensation Guide, please visit metagroup.com, or call 800-945-META (6382).

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