IT Salaries Continue To Increase

April 2, 2003 ( - Six out of 10 information technology (IT) managers indicate that IT compensation consumes 25% to 50% of their budgets, even though IT budgets have decreased or remained flat this year.

Comparatively, only 40% of IT managers claimed this same range last year, indicating salaries in the technology field have continued to rise despite the prolonged downturn in the economy, according to the 2003 IT Staffing and Compensation Guide, an annual report by META Group, Inc.

Further supporting this contention is the overwhelming majority of companies (75%) continuing to pay IT employees higher salaries than their non-technical counterparts, increasing from 67% last year. This percentage is getting close to the historic high of 2000, in which 80% of respondents reported paying higher salaries to IT employees, a compensation imbalance being partially attributed to the overall need to retain key IT staff.

Even though salaries for IT workers continue to rise, the rate of increase is holding steady with last year, averaging 5% for base salaries, though a few job categories requiring “hot skills” continue to see increases of 8%-10% depending on the skill. Additionally, even more respondents than last year predict an increase in the IT compensation budget during the next year: 26% of all respondents in 2003 compared with 22% last year.

The top method of employee retention remains the cash bonus. Over half (54%) of respondents are still offering IT employees an annual year-end bonus, while a smaller number (44%) are using sign-on bonuses as a means to attract higher-level IT employees.

This year’s report is based on compensation and best-practice surveys of more than 650 large and midsize companies spanning 14 industries and over 40 geographic markets. For more information about META Group’s 2003 IT Staffing and Compensation Guide can be found at .