A lack of adequate childcare is seriously damaging recruitment in Ireland, according to the Irish Small and Medium Enterprise (ISME) business organisation.
Childcare costs are higher in Ireland than anywhere else in Europe, keeping many mothers out of the recruitment market and making firms turn increasingly to migrant labour.
A further 250,000 migrant workers will be needed over the next five years, with childcare costs now averaging 180 euros a week nationwide for one child - three times the EU average, according to ISME research.
"Employers are increasingly relying on immigrants to fill vacancies," the ISME said. "Until a comprehensive childcare policy is introduced to alleviate the problem, a well-educated potential labour supply will remain untapped."
The ISME is calling on the Irish government to offer tax breaks to employers that offer childcare services.