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Firms are set to become more reliant on temporary workers in the coming months to plug a shortage of skilled staff, a report says.

A survey of over 600 employers showed virtually all were planning to increase or maintain their temporary workforce.

The Recruitment and Employment Confederation (REC) said the trend was in response to fewer candidates available to fill permanent vacancies.

Almost half of those questioned said they expected a shortage of workers for certain jobs, especially in construction, engineering, health and social care.

One in five businesses said hiring agency staff would be more expensive than having permanent employees.

REC chief executive Kevin Green said: “This looks like a tipping point for the jobs market.

“Faced with chronic skills shortages, some employers are giving up on trying to fill permanent vacancies, and instead looking for temp resource to ensure they have the manpower needed to meet demand.

“For jobseekers this means there are opportunities out there to boost earnings, because employers are prepared to pay a premium for people to fill vacancies on an interim basis.

“We could see this become a more attractive option for people in the context of rising inflation and poor pay growth.

“For employers there is a growing sense of urgency about the skills shortage because it threatens to throw the UK jobs market off track.”