As IT hiring slowly increases, employers seek security, Web services, Linux and business skills.After two and a half years, James Barry is hiring again. To deal with new, stringent regulatory requirements in the financial sector, the CIO at OneUnited Bank in Boston has about $250,000 budgeted this year to increase his 15-person staff by two or three positions."We are adding an assistant vice president of information technology, an operations manager and a documentation specialist," Barry says. "The documentation specialist is the hot one. With all of the new and emerging regulatory requirements, we are finding that we need to spend more time putting pen to paper to describe the internal controls and safeguards that we have in place."Analysts say issues such as increased regulatory scrutiny, coupled with IT budgets that are finally turning around, are resulting in a pick-up in IT hiring this year. But it will be slow, they say. In addition, while expertise in areas such as Windows and Cisco network administration continue to be in high demand, skills focusing on\u00a0security,\u00a0Web services\u00a0and\u00a0Linux\u00a0also are becoming hot. Analysts add that isolated technical expertise is no longer enough."The people who are the top performers and tend to provide the greatest value have a really unique perspective and a synthesis of a lot of different things, not just technical skills," says Diane Morello, a vice president and research director at Gartner. "They have an understanding of the business and the ability to anticipate what might happen if the business changes in a particular way."It's a trend that's been going on for some time as IT becomes more closely aligned with business. But until this year, IT managers primarily have been reshuffling positions internally. Now some, such as Barry, plan to add positions.Carlson Companies, a marketing, travel and hospitality conglomerate that employs about 190,000 people in 140 countries through its brands, including T.G.I. Friday's and Radisson Hotels & Resorts, did little IT hiring last year, mostly using contract workers to fill in where needed. So far this year, the firm has eight or 10 open positions for an IT staff of about 900, says Jana Bertheaume, director of recruitment at Carlson headquarters in Minneapolis. Most of those openings are new positions.While Carlson seeks Java and .Net skills, Bertheaume says the company also is focused on hiring people who know more than technology."We're looking for that combination person. The individual who's got a technical background, but also has the business savvy," she says. "Business analyst, project managers, people who have project methodology."For the first time in three years, analysts are predicting significant increases in IT budgets for 2004. IDC is the most optimistic, with an estimate of as high as 8% growth for the year. But analysts say that hiring increases, which usually lag budget upturns by about six months, aren't happening as quickly."It's a very different transition this time around, and what I think is different is that a lot of companies are offshoring," says David Foote, president and chief research officer at Foote Partners.Companies are taking a hard look at where they can\u00a0outsource\u00a0to fill needs. That includes bringing in temporary workers or hiring consultants, analysts say."If companies have guarded optimism rather than 'we're going to the moon' optimism, often times they'll bring in contractors first thinking if this isn't really as good as I think it is, I'm not making a full-time head-count addition," says Katherine Spencer Lee, executive director at IT staffing research firm Robert Half Technology (RHT).Gilbert Maldonado, systems information manager at technology printing firm Capital Spectrum in Austin, Texas, says his budget is being increased because of the need to replace aging hardware. But instead of hiring new people to help with the upgrades, Maldonado, who now runs the firm's IT department single-handedly after cutbacks two years ago, says he'll bring in temporary workers or consultants."We're just not at the point yet that we need to add full-time positions," he says. "Maybe next year."An RHT survey of more than 1,400 CIOs last year found that only 9% planned to increase their staff levels in the first quarter of 2004. The good news is that just 6% said they likely would make cuts. The majority, 84%, said they expected no change."We're not seeing a straight shot up out of the doldrums," RHT's Lee says. "But we are certainly seeing improvement."Lee says she is seeing the biggest hiring increase in the financial services and healthcare industries as they deal with regulatory requirements. In addition, large mergers and acquisitions are resulting in the need to hire IT staff to help combine disparate systems. The transportation industry probably will be the slowest to hire, she says.As for what positions are being filled, RHT's CIO survey found that Windows administrators (NT\/2000\/XP) are in highest demand, with 82% of respondents saying they had a need for that expertise. SQL server administration, Cisco network administration, Visual Basic development and Check Point firewall administration were also at the top of the skills list.Analysts say expertise in network security, particularly as it relates to spam and wireless technology, also will become important. Foote, who tracks pay rates for specific skills and specialties, says now is the time for people to jump into the security field."Our research has shown pay for information security and security jobs, skills and certifications have been above average for two years straight," Foote says. "The writing is on the wall: If you're not in that business, you might want to point your career toward that. . . . Security hasn't been a sexy place to work. It hasn't been funded very well. But clearly when the smoke clears it will be funded, and it will be funded well."Analysts say infrastructure know-how, such as network administration and\u00a0management; emerging technologies such as Linux, Java and .Net; and business intelligence skills are in high demand. Expertise in legacy systems such as VAX, COBOL and VMS will be a boon for prospective employees only if they also have expertise in how those systems can communicate with newer technologies."People who haven't learned anything new, not kept their skill sets current and don't have a desire to be adaptable and flexible and interact with the rest of the business will have a tough time," Lee says.OneUnited's Barry agrees: "In the past we would look for NT gurus or [Cisco Certified Internetwork Experts]. Now we are looking for people who understand not only the technology, but also the business requirement for the technology and how the business benefits and survives from the operation of the technology."