Employers are investing in learning and development rather than wages to hang on to talent in the current tight labour market, according to a report by the CIPD.

The latest Human Resources Quarterly Trends and Indicators Survey found that more than half (52%) of employers plan to increase their number of employees by the end of autumn.

Skills shortages figured highly with 48% of the 1,455 organisations interviewed saying they expected problems recruiting this season. While over half of organisations said they had greatest difficulty recruit for professional and skilled trade roles.

As well as investing more in developing current staff, employers are turning to migrant workers to fill skills gaps with almost a third (28%) saying they planned to recruit from abroad.

The public sector, despite promises of job cuts from Gordon Brown, is recruiting more than private companies both at home and abroad, with 87% expecting to take on more staff and more than a third recruiting from abroad.

Dr John Philpott, CIPD Chief Economist, said that the need for migrant workers to meet skills shortages put political debate about immigration into perspective.

"If rules are tightened in an arbitrary way, employers across business and government could suffer," he warned.

"It is interesting to note that the majority of employers are using migrant labour to fill vacancies requiring professional and technical skills, and are offering permanent contracts - against a common perception of low-skill, low-paid and casual jobs for migrant workers."

There is, however, some evidence that there may be an easing of tight labour market conditions on the way with 17% more employers expecting to take on more staff by autumn 2005 than those expecting to employ fewer - the lowest recorded in the CIPD's quarterly survey in 2004.