The Sunday Times of London reported that half of businesses surveyed by the Forum of Private Business said workers' poor skills affect their bottom lines.
The study found that some employers have been forced to hire workers with fewer skills than they need for the job.
"There is a clear gap between what businesses need and what businesses get when it comes to the ability of the education system to produce viable employees for small businesses," said Phil Orford, chief executive of Forum of Private Business.
"The research proves that our members have problems when it comes to finding staff with basic attributes such as communication, numeracy and literacy, as well as more developed and specific skills that are required by individual businesses."
Companies surveyed said some attributes they felt were needed in new staff members were a willingness to learn, work in teams and a strong work ethic.