The UK is sleepwalking into a low-value, low-skills economy which leaves the nation ill-prepared for its post-Brexit future, the Government is being warned.
The Chartered Institute of Personnel and Development (CIPD) highlighted "multiple failings" in the country's skills system.
England and Northern Ireland together rank in the bottom four Organisation for Economic Co-operation and Development (OECD) countries for literacy and numeracy among 16 to 24-year-olds, the organisation said.
Out of 19 countries, the UK ranks bottom of the class on young people's computer problem-solving skills.
Employers spend less on training than other major EU economies and less than the EU average, and the gap has widened since 2005, the CIPD said in a report.
It added that the UK lies fourth from the bottom in an EU league table on participation in job-related adult learning, with evidence showing a marked deterioration since 2007.
Lizzie Crowley, skills adviser for the CIPD, said: "This is a sobering analysis of the state of skills in the UK. Our report should serve as a real wake-up call for the Government to break with the past two decades of failed skills policy and set the UK on a new course that delivers the right results for individuals, organisations and the economy as a whole.
"While more efforts are being made to reform education, it's clear that there needs to be a much greater emphasis on learning and development in the workplace.
"As we move towards Brexit, and possible restrictions on overseas talent, it's crucial that government works in partnership with education providers and businesses to address these deep-rooted issues that continue to blight individual and business potential."
The CIPD said skills should be at the centre of the Government's industrial strategy.