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 Confederation of British Industry 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."
The findings come as hundreds of thousands of teenagers prepare 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 companies and conducted detailed 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."
Schools minister Jim Knight said ministers were reforming GCSEs to focus on the basics.Every single young person must have a good grasp of the basics," he said.