New data reveals the number of applicants available for jobs has fallen at its sharpest rate for 16 years, even as the number of positions continues to grow.
The Recruitment and Employment Confederation's (REC) Report on Jobs, a comprehensive survey of employment trends compiled in conjunction with KPMG, finds that the availability of candidates to fill permanent positions continued to fall during May.
Temporary and contract staff availability also decreased markedly, dropping at a slightly slower rate than April's 13-year record.
The number of vacancies continued to grow, however, despite easing to a five-month low. Permanent vacancies grew faster than temporary or contract roles.
Partly as a result of the increasing scarcity of available candidates, the rate of growth in salaries for permanent positions remained considerable during May.
The Midlands witnessed the strongest rise in permanent placements during May, with the slowest increase recorded in London.
Temporary billings growth was fastest in the Midlands, with the south also enjoying significant increases. There were robust rates of expansion in both London and the north.
Demand for staff in the private sector was significantly higher than in the public sector, the data suggests, with demand for permanent positions growing at a faster rate than for temporary ones in both sectors.
REC chief executive officer Kevin Green said: "The creation of these jobs, combined with the return of job fluidity, is creating a dynamic labour market. However the big issue remains that employers are finding it hard to find the talent and skills they need, yet ONS figures show that we still have 2.2 million unemployed people in the UK."
Mr Green added that the skills shortage has a bearing on the political debate surrounding immigration and the government should reform the visa system to ensure UK businesses are able to grow. He said this would create more opportunities for young people and more chances for career progression.
The greatest demand for staff was experienced in the accounting and financial sector, with engineering dropping to second place despite recording robust expansion.