Wages are still rising fast and employers need to think about how they are going to retain their key people in a time of severe skills shortages. That was the key message from the April Report on Jobs, produced by the Recruitment and Employment Confederation and professional services firm KPMG.

There was further strong growth of permanent staff placements and temporary staff billings, with the latter reaching a near nine-year high. There was continued evidence of labour market tightness, as candidate availability declined again. Skill shortages remained particularly marked among permanent staff, fuelling upward pay pressures - permanent staff salaries rose at the sharpest rate for 82 months.

Marcia Roberts, the REC's chief executive, said: "This month's report highlights the ongoing need for staff in most key sectors. The role of migrant workers will continue to be crucial to address these skills shortages. Recent reports have focused on the exploitation of migrant workers which is something that a body such as REC is working with the government to address. However, it is important to highlight the fact that the vast majority of migrant workers are able to access decent and well-paid jobs in the UK and are contributing to our dynamic UK labour market."

Michael Carter, people services partner at KPMG, said: "This month's figures provide further evidence of mounting wage pressures. While these mainly reflect skill shortages in specific areas, the labour market also appears to have tightened more generally — adding to the case for a rate rise this month.

"With these pressures, it is essential for employers to be reviewing where their key talent lies within their organisation and what strategies they have in place to enable them to retain these people in such a challenging marketplace. While people do move jobs for money, the key reasons why people typically change employment are lack of clear career development and dissatisfaction with their management. Employers should focus upon these areas."

The Report on Jobs Vacancies index posted 62.2 in April, its highest for three months. This signals a "further marked improvement" in the demand for staff, said the report. Demand for permanent staff rose for a 46th consecutive month. The Permanent Staff Vacancy Index went from 61.6 in March, to 62.2, coincidentally the same as the overall index. The temporary staff index went from 60.3 to 61.5, its highest for 33 months.

Within the permanent market, engineering/construction enjoyed the fastest growth in demand, with its index going from 58.7 to 66.1 For temporary/contract staff, hotel and catering was the fastest riser. Its index went from 53.1 to 66.

The report's detailed analysis of availability of staff confirmed the picture of skills shortages. It said: "Permanent staff availability fell at a sharp and accelerated rate in April. Around a third of panellists indicated a decline in availability during the latest survey period, with a range of skillsets reported to be in short supply."

Key permanent staff reported in short supply:

Accounting/Financial: banking executives, accounts staff, payroll

Secretarial/Clerical: PAs, secretaries, receptionists, junior admin

Executive/Professional: project managers

IT/Computing: IT sales, support staff

Hotel/Catering: Chefs

Engineering/Construction: design engineers

Blue collar: General Blue collar

Other: Sales, customer service

Key temporary staff reported in short supply

Secretarial/Clerical: receptionists, PAs, general admin

Hotel/Catering: Chefs

Engineering/Construction: engineers, oil & gas

Blue collar: HGV/LGV drivers, welders, unskilled works, night workers, general blue collar

Other: call centres, customer service, purchasing

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