Struggling in the economy, businesses take a ‘wait and see’ approach to hiring.

Unfortunately, Philadelphia is feeling the impact of the economic downturn in the same way as other metropolitan areas: There’s a chill in the job market, with companies proceeding slowly with their hiring plans for 2009.

“Many companies are being very cautious or have put in a hiring freeze,” says Kay Durkin, president of recruiting firm Phoenix Partners, based in Ardmore, Pa. “This all happened very quickly and it has caught companies by surprise. They are still hiring but they are being cautious. They are taking longer and they want to see more candidates.”

Rose Jackson concurs. She’s branch manager for recruiter the Sapphire Technologies office in the city, and says that while her office experienced an increase in demand for full time workers in 2008, that demand’s slackened more recently.

“Companies seem to want to wait for 2009 to see what is going to happen to the economy, and consequently their budgets, before hiring full time staff at this point,” says Jackson.

The economy is impacting other aspects of the tech workforce, as well. Kulicke & Soffa Industries, a maker of semiconductor-assembly equipment based in Fort Washington, Pa., is cutting salaries across the board by 10 percent – more for senior executives. The company also plans to eliminate 240 jobs.

Corporate caution is spurring a demand for contractors. Durkin, who has been recruiting for in IT since 1987, says requests for contract workers are increasing daily. No matter what’s happening in the economy, companies still need to get their work done, “so they are hiring contactors because … they need someone right away,” Durkin says.

While Jackson says the Philadelphia market isn’t as strong as it’s been in the past, mergers and acquisitions are creating opportunities for IT professionals who can integrate company systems. Plus, certain verticals – specifically the high technology and healthcare sectors – need people to complete essential projects.

The key industries that tend to drive Philadelphia’s IT market include banking, insurance, telecom, manufacturing and pharmaceuticals. (Indeed, despite the tumult in the financial world, Jackson says some financial companies continue to hire.)

On Dice, job postings in the city dropped during 2008, from 3,142 in January to 1,920 in December. Still, Philadelphia has a need for certain IT skills. Demand for .Net and Java skills remain hot, along with mainframe technologies, such as Cobol, says Jackson.

Durkin also can’t seem to find enough .NET expertise, and needs Java and SharePoint talent as well. Web developers, programmers, data center managers, system administrators and IT security expertise is also in demand. Large companies need storage experts, she says.