More than half of IT leaders expect overall IT staff salaries to increase next year despite declining budget expectations for 2018, according to TEKsystems’ annual IT Forecast research.

The survey found 58% of IT leaders expect their overall IT staff’s salaries to increase in 2018, that compares to 36% in the year-ago survey. Forty percent expect salaries to stay the same, compared to 63% in the 2017 survey; 2% expect salaries to decrease compared to 1% in the year-ago survey.

Many of those increases are likely to be marginal cost-of-living allowances, however, it is also possible that IT managers considering new initiatives in the coming year are anticipating the need to pay increased salaries to individuals possessing high-demand skill sets related to specific initiatives, according to the report.

“It is undeniable that the IT talent shortage is heavily impacting IT teams, and the vast majority of IT leaders plan to keep hiring the same or increase headcount for full-time (92%) and contingent (89%) in 2018,” TEKsystems Research Manager Jason Hayman said in a statement to Staffing Industry Analysts. “Thirty-nine percent of these hires will be for purposes of replacement/backfilling, 23% will be adding headcount and 38% will be doing a combination of replacement/backfill and adding new headcount. This is a stark reminder that IT professionals are on the winning side of the supply-demand issue.”

Forty-five percent of IT leaders expect software engineers, developers and DevOps talent to be the most difficult-to-find skills next year, the report found. Data analytics and security skills followed, each cited by 29% of IT leaders surveyed. While it is logical that programmers/developers and project managers would be ranked highly, the report noted an apparent shift in the importance of business analysts and help desk/technical support roles now being considered critical.

The survey also found 2018 IT budget expectations are close to the lowest levels seen in the previous five years. Forty percent expect their organization’s IT budget to increase, down from 49% in the 2017 forecast; 16% expect a decrease, up from 12% last year. IT leaders expecting budgets to stay the same rose to 44% from 39% last year.

“It appears as though the traditional, centralized IT department is becoming a thing of the past,” Hayman said. “IT leaders and their departments are being asked to do more with less, as we’re seeing a decrease in IT budgets with tech spend moving outside of centralized IT. That being said, the responsibilities for ‘keeping the lights on,’ including data integration, information security and a host of other duties, remain. This could also be why we see less confidence and movement in launching new initiatives within the department.”

TEKsystems, part of the Allegis Group, is the largest IT staffing firm in the US. The online survey was conducted in October 2017 and included more than 1,000 North American IT leaders — CIOs as well as IT VPs, directors and hiring managers.