Many UK employers are still being forced to lay on remedial lessons for school leavers in reading, writing and maths, according to new research.
And they are not just lacking in the three Rs - nearly two thirds of business leaders are concerned that young people are not developing vital skills such as self-management at school.
The latest CBI/Pearson Education and Skills Survey shows that in the past year, over two in five employers (42%) have organised remedial training for at least some of the youngsters joining them from school or college.
The most common extra training for school leavers is in IT, but around a fifth of all employers are putting on classes in numeracy or literacy, with some providing extra help in more than one area.
The report, based on a survey of 542 UK firms employing around 1.6 million people, reveals that in the past five years, concerns over weaknesses in workers' basic skills have deepened.
"It is probably not so much that levels of attainment have declined as that the levels of skill needed tend to escalate with the growing complexity of the workplace," it says.
Overall, more than a third (35%) of employers are dissatisfied with school leavers' literacy skills, while 30% are unhappy with the levels of numeracy - around the same proportions as a decade ago.
Employers are even less satisfied with young people's so-called employability skills, the survey suggests.
Overall, three in five (61%) believe there are weaknesses in school leavers' self-management skills, while 69% report problems in youngsters' business and customer awareness and 37% are concerned at their attitudes towards work.
The CBI said the survey findings suggest that there are pressing issues in schools that need to be addressed.
The most important reason to raise school standards is the need to provide businesses with the skills they require, according to 73% of those questioned.
More than half (57%) said it was important to raise standards to allow young people to live fulfilling lives, the survey adds.
It also found that many employers believe that primary schools should be focusing on the basics - reading, writing and maths, while secondary schools should prioritise developing the skills pupils will need for the world or work, as well as still working on literacy, numeracy and technology.
CBI director general John Cridland said: "There is nothing more important to the future economic success of our country, and the lives of young people, than education.
"The foundations for the development of higher-level skills and the essentials for working life, that employers require, are laid at school.
"With the right start at school our young people can go on to have successful and fulfilling careers and have a strong base from which to learn more at college, university, or in the workplace.
"But levels of educational attainment are rising fast in many leading and emerging economies, so in the UK we must ensure that our education and skills system can continue to compete at the cutting edge."
The survey also reveals concerns amongst businesses about careers advice in schools, with 68% saying it is still not good enough.
Over 60% said they would like to do more to provide careers guidance for young people.
More than a third of those questioned said they are now working more closely with schools than they were a year ago.
And the report also found that in general, there is no one qualification that teaches a combination of literacy, numeracy and employability skills effectively.
While maths GCSE was seen as the best course for numeracy, firms also said that vocational qualification are the best at giving youngsters the broader skills that they need for work.
A Department for Education spokeswoman said: "We are reforming the education system because currently it equips far too few students with the skills that employers demand.
"We are toughening up exams, teaching and the curriculum so all young people have the essential English, maths and science skills they need."
New technical colleges are teaching highly specialist technical skills, with studio schools working with businesses to offer more vocational courses, she added, while vocational education is also being overhauled and extra apprenticeships are being created.
Chris Keates, general secretary of the NASUWT, the largest teachers' union, defended schools, saying the government and employers should take more responsibility for tackling youth unemployment.
She said: "There can be no doubting the commitment of schools and teachers to delivering the highest possible educational standards for all children.
"Year on year improvements in examination results and record numbers of young people staying on in education and training are testament to the achievements of our schools.
"It would be a travesty to pretend that youth unemployment is the fault of schools.
"Regrettably, too many young people are facing a bleak future of unemployment, not because of a lack of skills, but because of a lack of jobs, exacerbated by the failure of the Coalition Government to prioritise investment and growth over cuts and austerity.
"Despite the almost constant unjust and unfounded denigration and criticism of schools, the fact remains that the UK is among the world's leading education nations according to international evidence.
"Of course teachers are not complacent and there remains scope for improvement.
"This report rightly highlights the importance of developing the skills needed for our economy to thrive in the 21st century."