Too many school leavers turn up at work looking scruffy, "grunting" and unable to write or add-up properly, business leaders warned today.
A report from the CBI employers' group found one in three businesses were forced to pay for staff to have remedial lessons in basic literacy and numeracy.
Bosses condemned standards of spelling, handwriting and mental arithmetic - once the bedrock of lessons in "the three Rs" at school.
And many firms raised concerns over the practical and social skills, as well as the "general attitude" of school leavers, with one warning: "We'll soon have a nation of people unable to put up shelves."
A West Midlands CBI spokeswoman said it was crucial for the region that school leavers come to the workplace with basic skills in place.
She said: "The West Midlands still retains a higher-than-average manufacturing base and, if we are to compete in the 21st century globalised economy, we can only do so on the basis of high-value added, high-quality goods and services. High quality and appropriate skills are essential."
The CBI report came as hundreds of thousands of teenagers prepared to receive their GCSE results on Thursday.
Figures last year showed fewer than half passed five GCSEs including maths and English at grade C or better.
Ministers have promised a renewed drive to improve the basic standards of literacy and numeracy among 16-year-olds.
The CBI surveyed 140 member companies and conducted detailed case studies of 19 for the report.
Director general Richard Lambert said Britain could lose jobs to China and India if basic skill levels among UK workers do not improve.
"Employers' views on numeracy and literacy are crystal clear," he said.
"People need to be able to read and write fluently and to carry out basic mental arithmetic. Far too many school leavers struggle with these essential life skills.
"The fact that one in three employers ran remedial courses for their staff in the last year is a sad indictment of how the education system has let young people down."
The report set out the "real-world skills needed and used in real workplaces" and highlighted a string of problems businesses face with skill levels among staff. These included:
* Writing: "In virtually every organisation contacted, senior managers reported that many employees find it difficult or impossible to produce written work", the report said.
* Spelling and grammar: "Time and again these are seen as problem areas for employers," the report said.
* Maths: Basic mental arithmetic was often lacking. Many bosses commented on an almost "total lack of knowledge of times tables", the report said.
* Social skills: Employers stressed the growing importance of social skills and case studies and also found some concerns about general attitude including turning up on time and taking responsibility for themselves, the report said.
Schools minister Jim Knight said ministers were reforming GCSEs to focus on the basics.
"We are changing the way we measure performance in these basic skills and toughening up the English and maths GCSEs to ensure that young people master the three Rs," he said.
Trials begin in the autumn of new GCSE modules which will examine whether teenagers have mastered the "functional" literacy and numeracy skills they will need for work.