The education system is failing to ensure enough school leavers master the "three Rs", a survey has suggested.
This year's GCSE results will be released on Friday
The CBI said 42% of the employers it surveyed were unhappy with reading, writing and numeracy skills.
Half thought school leavers lacked communication and team-working skills. The CBI demanded government "action as well as words" to raise standards.
The Department for Education said there were already proposals to improve the basics and introduce "tougher" GCSEs.
A spokesman said reforms to league tables would also lead to schools being judged on their ability to help pupils score five A to C grades in GCSEs including English and maths.
The existing measurement of five C grades or better in any subjects will be phased out by 2008.
"These changes will ensure that all schools are focusing on ensuring their pupils are equipped with the basic skills," the spokesman added.
The general secretary of the Secondary Heads Association agreed that the issue was being addressed.
John Dunford told BBC News: "I do think that schools have become aware that they are needing to put more emphasis on achievements in basic maths and English.
"Up until now, of course, schools have been deemed successful if students get any five A to C passes at the GCSE."
But he said the government's new performance indicators for schools would ensure students had to achieve "a certain level in the basics".
Schools now had a wider responsibility in preparing pupils for life and were expected to teach broader skills than just the "three Rs", Mr Dunford added.
The Confederation of British Industry published its survey ahead of the release of this year's GCSE results on 25 August.
The organisation said barely half of GCSE students achieved a Grade C or above in maths (54%) and 60% the same standard in English.
"The figures are evidence the system is failing teenagers and the taxpayer, as well as employers - who have to pay for remedial lessons for new recruits on top of the taxes they have already paid to fund the education system," it said.
Director general Sir Digby Jones said: "A working knowledge of English and maths provides a vital foundation for the modern world of work - but the education system is failing many young people by leaving them ill-equipped."
The CBI said its 2004 survey figures found 83% of businesses thought the education system's first priority should be improving literacy and numeracy levels.
Eight out of 10 jobs required a basic competency in the "three Rs" it said.
"The CBI welcomed the government's pledge of a 'relentless drive' to raise standards and eradicate illiteracy and innumeracy but there has been no clear action to back up the promises of February's education white paper," Sir Digby said.
"We need to see action as well as words - at the moment the UK economy is losing up to £10 billion a year because of poor basic skills, whilst our school-leavers are held back from fulfilling their potential.
"Too many emerge from our education system with no feeling of self-worth - leading to social dislocation, crime and wasted futures."