Training schemes, in-house programmes and secondment from the civil service are among the solutions proposed by the small firms' lobby group, ISME, yesterday, to tackle skills shortages in the workplace. The group's chief executive, Mr Frank Mulcahy, said that it was optimistic to suppose that the labour shortage would be filled by the unemployed.

"Officially, unemployment now stands at 10.4 per cent. However, in the view of many, the vast bulk of those officially recognised as unemployed are not available for work, are disinclined to work and, in some cases, are unemployable," he claimed. He said that there was a percentage of the unemployed in every economy which was "not inclined to work" and Ireland's unemployment rate was close to that.

He recommended that Community Employment Schemes be "drastically wound down" and the resources re-targeted because they were costing the Exchequer £300 million a year. It had long been recognised that the small and medium enterprise sector did not have the resources for training and re-development. Multinational companies received £15,000 on average per worker from State assistance while the indigenous sector only received £3,000.

Mr Mulcahy said that in-house training and mechanisation programmes could increase productivity as "a valid way of addressing the labour shortages".

An attractive secondment policy from the civil service to the private sector would reduce the public pay bill, he added.