Young employees come to the workplace with few business skills, too much text book theory and too high an estimation of their abilities - all at a significant cost to business.
These are the key findings of a survey commissioned by Young Enterprise, the UK's largest business and enterprise education charity, and carried out among HR directors of UK companies.
The study comes as a £200,000 vocational skills centre in County Durham designed to provide a range of work-based training prepares to open its doors.
Of the businesses quizzed by Young Enterprise, 68% said many young employees are not equipped for business, 76% believed young employees can often have a higher estimation of their abilities than is the reality and 63% believe that too much emphasis is placed on theory at school and university.
Companies identified three key areas for concern: project management (50%) financial skills (45%) and leadership (49%). Over one third (35%) of respondents also believed that time management skills are lacking, while one third cited poor presentation and reporting skills.
And while nearly half (48%) respondents say that their young workforce do not shy away from competing, 43% say that young employees lack entrepreneurial flair, 36% say that they cannot deal with criticism and 33% say that they cannot deal with setbacks.
Young Enterprise has set up a series of summer schools for teenagers designed to boost their skills.
Michael Savory, chief executive of Young Enterprise, said: "Team working is a required skill from day one of a young person's employment and one that our Summer Schools for 14 to 16-year-olds are focusing on.
"Young Enterprise is able to offer students essential enterprise experience in the summer holidays as well as in term time."
The Apprentice star and entrepreneur Sir Alan Sugar said: "We live in a fast moving world and the earlier that young people grasp the essential skills for business, the better."
Meanwhile, South West Durham Training (SWDT) will open its new £200,000 school for skills at its headquarters in Newton Aycliffe next month.
Around 530 sq m of workshop space has been fitted out to provide work stations and classrooms where 14 to 16-year-olds will study towards vocational GCSEs in engineering, electronics, manufacturing, business and technology-related subjects.
Ann Cant, head of operations at SWDT, said: "This is an exciting initiative for us which will provide hundreds more Durham students with the chance to experience the buzz and see the great career opportunities available in vocational learning.
"We will be covering both practical and theory but also the softer skills such as team working, communication and enterprise."
Key findings from the Young Enterprise survey:
* 68% of respondents believe that many young employees are not equipped for business
* Over three quarters (76%) believe that young employees can often have a higher estimation of their abilities than is the reality
* 63% believe that too much emphasis is placed on theory at school and university
* 58% believe that young employees have not been trained to think laterally
* 84% recommend that young people gain more experience of the business world while at school or college and 70% recommend supplementing coursework with business training.