"2009 is likely to be an uncertain year economically, however Sydney remains a skills-short market in IT," the report states.

Higher Recruitment director Rob Stevens said some IT jobs should stabilise this year from essential IT system maintenance projects.

"IT is a relatively recession proof industry, compared to sectors such as finance, [because it] is needed through the tough times. "It is beneficial for candidates to remain permanent where possible, increase their experience and show true measurable value to their current organisations. Contractors on the market [should] go permanent where possible," he said, adding that businesses are weary of career contractors moving to permanent roles because they often recommence contracting when the market stabilises.

People Bank COO Peter Acheson said contractors will win-out this year in the aftermath of permanent staff redundancies.

"Permanent recruitment has fallen off 30 to 40 percent since March 2008, while contracting has picked up and is a great short-term option for those made redundant. Businesses will often find a shortfall in staff and will hire contractors to finish projects," Acheson said.