Retailers say more has to be done to attract people to the industry, otherwise there will be a chronic shortfall in staff numbers for years to come.

Staff shortages in retail, service and tourism-related businesses meant "situations vacant" notices appeared regularly in shop windows and newspapers throughout 1998, a situation unimaginable a few years ago.

Unlike the well-documented high-tech skills shortage, these businesses need relatively low-skilled employees to fill less well paid positions.

The increased choices available to school leavers and those returning to the workforce, combined with the lowest unemployment rate for decades, has created a smaller pool of workers for shops, restaurants and tourism-related businesses. The Republic's current unemployment rate of 7.8 per cent is 2.4 percentage points below the EU average of 10.2 per cent.

Small businesses are having the most difficulty competing in the new environment, says Mr Frank Mulcahy of the Irish Small and Medium Enterprises Association (ISME). "The problem is growing and certainly getting worse for SMEs. The larger firms are able to offer bigger packages and to entice the senior staff from the indigenous sector."

Members of the services and tourism industries are concerned that the rising demand for workers may have a negative impact on public perception of the sector.

"Tourism is the greatest growth industry in Ireland. We fear people will take up a position without proper training and standards may decline," says Ms Deirdre Moran, press officer for CERT, the State-run tourism training agency.

The abolition of third-level fees has caused the most concern for the sector as competition increases for a steadily declining number of 18-year-olds.

The way forward is through an innovative approach to staffing and training, Ms Moran says. "We have become more flexible in line with the problems that are arising. For example, we trained profoundly deaf people who are now in 100 per cent employment."

During the winter, CERT also runs a training centre in Donegal, where there is high seasonal, or general, unemployment during these months.

Predictions for the fate of the retail sector in the next year are even gloomier than the service and tourism sectors. In October, FAS released a report predicting critical staff shortages in the retail sector unless initiatives were taken to attract new workers and train them in time.

Retailing provides 153,800 jobs, equivalent to 11.5 per cent of the entire workforce, says Future Training Needs in the Irish Retail Sector, a report compiled by the Retail Training Advisory Committee of FAS.

"As the labour market is tightening and job applicants have more options, we've been telling employers to address the main issues such as low rates of pay, lack of job promotion opportunities and unsociable hours," said Mr Gregory Craig, a spokesman for FAS.

Changing the image of the sector is no easy task, says Mr Michael Campbell, director general of the Retail Grocery, Dairy & Allied Trades' Association (RGDATA) which represents 6,000 family grocery shops throughout the State. "Young people are far more selective in the hours they work, they have a different set of values and priorities than those who went before them."

As is the case with the IT, service and tourism industries, skills shortages are a problem in the lower-paid retail sector. "There are two shortages, a skills and a staff shortage and one comes before the other," Mr Campbell says. "The staff one will be with us until we can establish alternatives, locally or outside the country. But then, having got employees, how do you give them the skills? That can only be done through training and we only put through 350 people a year."

In the past, much of this sector competed with the black economy for workers. This no longer appears to be the case, Mr Campbell says. "I think the government has made great inroads there but now we're competing with every computer plant that's going up."

RGDATA will be working with FAS throughout the coming year to upgrade the level of training in the sector. "It becomes more pertinent as it becomes more difficult to get high-quality people. Ten years ago nobody thought this was possible, I suppose we're victims of our own success."