Budgets Buying More Time, Less TechnologyBudgets Buying More Time, Less Technology

Money allocated to compensation is becoming a bigger portion of IT budgets, even as those budgets are pared, according to a new research study.

In surveying IT managers, consulting firm Meta Group found that 61% deal with flat or decreased budgets that are one-quarter to one-half compensation. Only 40% reported that kind of dominance by compensation last year. Meta says that means IT salaries have staying power despite economic woes.

IT salaries continue to rise at an average of 5%, and some jobs requiring hot skills are increasing by 8% to 10%, according to the report. Twenty-six percent of respondents see IT salaries increasing in the coming year, up from the 22% who thought so a year ago.

In fact, Meta says, despite sallow budgets, IT compensation not only will rise, but in some cases it will rise at the expense of non-IT employees.

Three-quarters of survey respondents say their companies will grant higher pay hikes to IT personnel than to other employees, up from two-thirds in 2002. According to Meta, this percentage is zeroing in on the historic high of 2000, when 80% of respondents reported paying higher salaries to IT employees. Meta partially attributes this compensation imbalance to the overall need to retain key IT staff.

The top method of employee retention: cold cash. According to the guide, 54% of respondents offer IT employees an annual year-end bonus, while 44% use sign-on bonuses to attract higher-level IT employees.