Claims of employer concern over exam grade inflation are "wildly overdone", according to CBI director general Digby Jones.
He said the reform of exams such as A-levels and GCSEs - which some believe should be replaced by diplomas - does not feature among the top three business priorities for the education system.
"It is not true that thousands of employers are fretting about differentiating between the brightest students,” he said. “They are more worried by the real education scandal, which is the number of students who come out of the system totally unprepared for today's world of work.
"There are simply too many young people who cannot read or write and do not understand the business world they are about to go into. That is where the education system is really letting down young people,” Jones said.
The CBI-Pertemps annual employment trends survey, due for release next month, shows that firms want:
- Higher levels of literacy and numeracy
- More teachers with better qualifications
- Extended modern apprenticeships.
The survey also draws attention to the need for school leavers to improve their life skills.