John Cridland, director general of the CBI said recovery is taking root and businessmen and women have a "spring in their step" compared with a year ago.
In his New Year message, he said: "Businesses must support employees in every part of the country to move up the career ladder, while also giving a helping hand to young people taking their first tentative steps into the world of work.
"As the financial situation of many firms begins to turn a corner, one of the biggest challenges facing businesses is to deliver growth that will mean better pay and more opportunities for all their employees after a prolonged squeeze."
Mr Cridland said it was positive news that jobs were being created, adding it was shaping up to be a full-time recovery with the majority of new jobs being permanent.
For the first time since the start of the recession, 2014 will see most firms increasing the size of their workforce, boosting their graduate intake and the number of apprentices they take on, he said.
"But there are still far too many people stuck in minimum wage jobs without routes to progression, and that's a serious challenge that businesses and the Government must address."
Mr Cridland spoke of the importance of skills, calling for a Ucas-equivalent vocational system to help raise awareness and parity of esteem for alternative routes to higher skills.
"If 2013 was the year that business trust took a hammering on a range of issues from corporate taxation to energy prices, then 2014 must be the year that business leaders take action to rebuild that trust," he said.