British firms are being faced with no choice but to send their staff to remedial training to address basic gaps in their English and maths skills, a new report says.
Research by the Confederation of British Industry (CBI) says that one-third of businesses are paying the cost of arranging literacy and numeracy training sessions for workers, while one-fifth believe that non-graduate recruits have basic skill problems.
Today's government-commissioned report comes as the Department for Education and Skills plans to overhaul the GCSE system in place in England and Wales, with new modules introduced to deal with fundamental skills.
According to the CBI, although school exam results consistently show that top-level students are earning higher grades, the proportion of children failing to pass the benchmark level in terms of numeracy and literacy skills is rising.
More than one-third of students failed to get a C grade or above in English GCSEs last year, while only almost half could not achieve the same result in maths.
Richard Lambert, the director of the lobby group, explained that with job opportunities for less-qualified candidates expected to shrink over the next 15 years, both businesses and employers stood to lose out if the skills gap was not addressed.
"We must raise our game on basic skills in this country. The UK simply can't match the low labour costs of China and India. We have to compete on the basis of quality, and that means improving our skills base, starting with the very basics," he said.
"Employers' views on numeracy and literacy are crystal clear: 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," Mr Lambert added.
Basic skills that employers told the CBI they would like to see in more candidates and workers is the ability to perform mathematical calculations without the aid of a calculator and better understanding of correct grammar usage and spelling, as well as having handwriting that is easy to understand.
One personnel manager at an unnamed construction firm told the CBI: "The standard of literacy shown by people filling in the double-sided application form for a trainee position is often very poor. Many applicants can't construct a sentence and their grammar, handwriting and spelling are awful. It's a delight when an application form is good."
Another manager from a building company added: "Many don't have the skills to work out the areas of squares and rectangles, let alone other shapes."