The education system should be doing more to teach youngsters the basic skills needed in the work place, the Forum of Private Business (FPB) has said.
Meeting with a House of Commons Select Committee into youth unemployment, the FPB warned that many pupils lack important workplace skills such as punctuality and customer service.
It said such skills should form part of the National Curriculum, with small businesses directly suffering as a result of having to teach new starters basic work skills which can often be labour intensive and costly.
It also encouraged the Government to widen the criteria for certain youth training schemes and make them less restrictive to small and micro businesses. It claimed there was evidence to suggest a disproportionally low engagement between small businesses and training providers, who are instead focusing on larger corporations.
Senior policy adviser for the FPB, Alex Jackman, said: "Employers are the number one consumer of the products of education, and they are rejecting school leavers because their standards are too low.
"We are not referring to standards of academic education in this instance, but the more basic work skills all new starters should at that point in their lives already have drilled in to them. Things like being punctual, being able to deal with difficult customers or answering the phone politely."
According to the FPB, schools should be working alongside employers to determine what skills workers are lacking, and better prepare pupils for work.
The FPB also added that small businesses would welcome a widening and simplification of the employer incentives available to them.
It said that the national insurance holiday scheme - which exempts qualifying new businesses from certain employee contributions - and various apprenticeship grants, were too complicated and come with too stringent terms for smaller businesses to understand.
It suggested a 'single system' where businesses could add their basic details and find a list of suitable schemes available to them would be 'a huge help.'