Research by the British Chambers of Commerce (BCC) found that business and education were “worlds apart” when it comes to careers advice.
The business group called for specific action to bridge the gap, including lessons on recruitment and interview techniques and putting students into contact with local firms.
The BCC also pressed for work skills such as communication and computer literacy to be embedded in the school curriculum.
The report, published ahead of the latest unemployment figures, said action was needed from schools, the Government and businesses.
John Longworth, director general of the BCC, said: “Our latest research shows that businesses and schools are still worlds apart when it comes to getting young people ready for the world of work.
“Businesspeople across the UK believe that secondary schools need to do more to help young people transition into employment by ensuring that their students have the preparation that businesses truly value.
“High youth unemployment and business skills gaps are a cause for national embarrassment. Unless ministers allow schools to increase their focus on preparing students for the working world and businesses step up and do more to engage, inform and inspire, we could fail an entire generation of young people.
“Preparing students to face potential employers should be given the same level of priority as academic achievement in schools across the UK.”
The survey of 3,200 businesses and 300 education leaders found a “mismatch” on the views of careers guidance.
Four out of five secondary schools believe they are effective at offering careers advice, but all businesses said the system needed to be reformed.
Kevin Courtney, deputy general secretary of the National Union of Teachers, said: “The NUT shares a number of the BCC’s concerns, in particular their dismay at the high level of youth unemployment, and the complacency of Government in supporting young people.
“It is Government policy and cuts which have stifled careers advice and rendered 14-19 education a muddle.
“It was the coalition Government, rather than schools, which chose to strip out work experience and work-related learning from the national curriculum for 14 to 16-year-olds.
“The Government should urgently review the availability of independent, impartial careers advice and guidance. It was their abolition of Connexions which contributed greatly to the current parlous state of careers services.”
KK Fine Foods, which produces frozen ready meals, announced an expansion project supported by the Welsh Government that will create 100 new jobs at its base on Deeside Enterprise Zone in Flintshire, north west Wales.
The £833,000 investment is supported by a £100,000 loan from the Welsh Government to enable the company to open a third production hall to service new contracts from some of its key customers, including Wetherspoons, Ikea, Aldi and Morrisons.
Work has already started and will be completed by March 2016 with the majority of jobs being created between now and March 2016.
An Education Department spokesman said: “This Government is extending opportunity to all young people by equipping them, through a high-quality, rigorous curriculum, with the core knowledge and skills most valued by employers.
“And through the Careers & Enterprise Company, we are helping schools and colleges develop closer links with local businesses, ensuring employers themselves play a central role in preparing young people for the world of work.”