The latest Report on Jobs reveals that permanent placements reached a 33-month high in December as demand for staff continued to strengthen.

Published by the Recruitment & Employment Confederation and KPMG, the report also reveals the sharpest rise in temp billings for four months.

But while there was an increase in job vacancies during December, there was a drop in the number of candidates available, particularly skilled staff.

As a result, there was a further rise in employee pay during December with inflation of permanent staff salaries remaining close to November’s 71-month high.

Michael Carter, people services partner at KPMG said: “The figures show a strong start to 2007 with permanent and temporary placements continuing to rise in December, and given that demand is growing at the strongest rate for over two years, this type of activity shows no sign of slowing down.

“Within a strong recruitment market, an employer must seek to differentiate itself from its competitors, especially when the figures showed a continued deterioration in the availability of permanent candidates in December.

“As part of being an employer of choice, employers should ensure that employees and potential employees are fully informed of the value of their total remuneration package (including salary and all benefits), so that they maximise their own packages and can be sure that potential employees are comparing like-with-like when deciding which opportunity to take.”