The average salary of employees at IT and biotech companies increased 3% in 2003, with companies forecasting similar raises for 2004, according to a new report released by Aon Consulting, a human resources consulting firm.

The findings represent the results of quarterly hiring and salary surveys Aon conducted in 2003 of about 500 U.S. biotech and 1,500 U.S. IT companies, including software, hardware, semiconductor, and telecom companies. The average salary increased 3% last year, despite pay and hiring freezes, layoffs, and other cost-control measures at many companies, says John Radford, an Aon senior VP.

The findings also indicate that companies plan to increase their salary budgets by 4% in 2004, which will likely translate to raises of "mid-3% to high 3%" for the average worker, he says. This is good news, because over the last three years, companies had projected salary freezes or decreases for the following year, he says.

Hiring is also expected to rise, particularly in the second half of 2004, Radford says. Among the hottest skills sought by technology and biotech companies are engineering, IT infrastructure, and sales and marketing support, he says.

Average annual salaries for some of the hottest positions sought by employers include business-systems analyst, $67,100; IT programmer/analyst, $69,400; software development engineer, $83,300; and product-marketing engineer, $81,000.

Although the average salary of tech workers rose last year, it's too soon to tell how a trend toward offshore outsourcing by some companies will impact salaries in the long term in the United States, Radford says. "Clearly in the tech labor market, companies are looking to go offshore for all levels of positions," he says. "A software-design engineering team in India gets paid one-sixth of the salary paid to a software-design engineering team in Silicon Valley."

Also, although biotech recently has been generally regarded as a hotter market than information technology, salaries and hiring plans at biotech companies are fairly conservative, Radford says. That's in part, he says, because many of the newer biotech firms still in product-development stages haven't yet begun selling their creations in the marketplace.