The Office of National Statistics (ONS) yesterday published its monthly job figures, which showed the rate of unemployment in the UK dropped to 7.7% between May and July from 7.8% in the previous three months.
The number of people unemployed fell 24,000 to 2.4 million but the number of 16-24 year olds unemployed for longer rose slightly by 9,000 to just under one million.
Hadley said the figures showed the UK is on the "road to recovery" but we need a greater focus on young people and the skills gap.
"Looking ahead, the huge challenge we face is ensuring that there are enough workers with the right skills to meet this demand," Hadley said.
"More efforts should be focused on addressing this skills gap rather than picking holes in flexible working arrangements.
"We still need to do more to help young people break into the world of work and ensure that workers can continue to progress within the jobs market. To achieve this, the priority must be to develop careers guidance network which is fit for purpose."
Despite the drop in unemployment the figures showed the number of people working part-time, because they cannot find a full-time job, increased by 25,000 in the quarter to 1.45 million - the highest since records began.
The unemployment rate has taken on new significance after the Bank of England's new governor Mark Carney last month said it will not consider raising interest rates from their record low until it falls to 7% - which it forecasts will take around three years unless there is a spike in inflation.
CBI director of economics Stephen Gifford also called on the Government to tackle high youth unemployment levels.
"These figures show the upturn in economic data we've seen through the spring and summer is starting to show up in job creation," said Gifford.
"However, youth unemployment is persistently high and growth alone will not address this problem.
"We've called on the Government to reduce employers' National Insurance to help tackle this, and the launch of the Million Jobs campaign further emphasises the need for action to help young people enter a tough jobs market."