The Recruitment and Employment Confederation/KPMG monthly Report on Jobs says May had the lowest number of applicants for permanent IT jobs since November 1997, despite the number of job vacancies continuing to rise.

With the skills gap widening, salaries are continuing to increase as a result of employers trying to attract more applicants, says the REC .

Kevin Green, REC's CEO, said: "The big issue remains that employers are finding it hard to find the talent and skills they need, yet we still have 2.2 million unemployed people in the UK.

"Now is the time for government to reform the visa system to ensure that the UK retains a flexible labour market so our businesses can grow and create more jobs."

He claims: "This will give young people and the long term unemployed greater opportunities to enter the workforce and successfully progress up the career ladder."

The report says that although overall pay increases for all job sectors "eased slightly" from April's 81-month high, the rate of growth in permanent salaries "remained considerable" in May. Meanwhile, temporary/contract staff hourly pay rates rose at their fastest pace since December 2007.

The IT skills and job roles in highest demand during May were business analysts, cloud, digital media, e-commerce, games technology, Java, senior developers, PHP and project managers.

Bernard Brown, partner and head of business services at KPMG, said: "The latest figures suggest employees want more from their workplace than better pay and better benefits.

"Even though starting salaries continue to rise, jobseekers are sending out a very clear message that remuneration is not the only reward they are after. With candidate availability at its lowest point for almost 17 years, individuals are saying that prospective employers are going to need to widen their offer to tempt top talent to move."

He said: "It could mean that we have finally reached a point where employers have to consider reshaping roles, working arrangements and their own expectations, or risk being caught out by an endless cycle of unfilled roles and unfulfilled workers struggling to cope with increasing workloads."