Employment has the potential to increase by 234,000 between now and 2010, according to the latest FAS Irish Labour Market Review.
The report says that EU enlargement in May 2004 will inflate the bloc's population by 80 million people and that the Republic's labour needs are likely to be met from within the enlarged union over the coming years.
According to FAS, with 500,000 people in the workforce without a Leaving Cert and mostly working in low-skilled jobs, it will be necessary for many to acquire new skills if Ireland is to compete as a high skilled economy.
However, the rise in Net employment will only be 13,000 next year as employers hold off to see how the economy develops.