Young people with relevant work experience have the potential to earn £1,050 a year more than those without, a survey of employers suggests.
Prince William did a three-week placement in the City
Researchers commissioned by the Learning and Skills Council (LSC) spoke to more than 400 employers in Britain.
Nine out of 10 felt work experience was important for CVs and about half said in the future those without it would find it more difficult to find a job.
The LSC said bosses could still do more to create aspirational work placements.
The survey also found that about a third of employers offered paid work placements while 45% provided unpaid placements.
Competitive job market
The LSC's director of learning, Julia Dowd, said work experience was absolutely crucial in today's competitive job market.
"Not only does gaining practical work-based experience give young people an opportunity to see whether they are suited to a job, it also means a bigger pay packet when they enter the world of work full-time," she said.
Minister for skills, Phil Hope, said work experience was essential to link education with employment.
"It is critical that all young people are given work experience opportunities as this allows young people to make decisions about their learning and employment paths," he said.
Many young people undertake a week-long placement while still at school or college to get a brief introduction to work.
But the LSC wants more employers to sign up to its Young Apprenticeships scheme offering 16 to 24-year-olds on and off-the-job training while being paid.
Currently there are 255,000 young people on the scheme, able to choose from 180 career paths in 80 sectors of industry and commerce.
Since 2004, some form of work-related learning has been statutory for all young people, whether talks from industry representatives or work placements.