The survey published today found students looking for work lack key skills, such as: self-management (54%), problem solving (41%) and attitude to work (35%).
John Cridland, CBI, director-general said: "Businesses want rigour, as well as young people to be rounded, grounded and ready for working life."
The CBI also said there is a stubborn shortage in the skills the UK needs to remain competitive and fuel long-term growth.
In the survey of 294 firms employing 1.24 million workers, it revealed 39% are struggling to recruit workers with the advanced, technical STEM skills they need - with 41% saying shortages will persist for the next three years.
It also found almost half lack confidence in getting high-skilled workers in future overall - with more acute concerns in key sectors like manufacturing, construction and engineering.
The CBI fears a return to long-term growth might be held back by shortages in key industries. It argues next week's Spending Round needs to protect the skills and apprenticeship budgets as far as possible, while giving employers' greater control.
Cridland said: "We're facing a critical lack of skills in some key industries, just as the economy starts to pick up. Long-term, sustainable growth will come in part from rebalancing towards high-value products and services, which demand much better technical skills.
"We need to boost our skills base urgently before the UK loses more ground. It's time to stop looking on enviously at Germany and build a system that works."
Cridland added: "The Chancellor is walking a tough line in making substantial savings, without harming the fledgling recovery. There are few better ways of underpinning long-term growth than investing in skills.
"That means routing funding more directly to firms. We can't afford for funding to be badly targeted or sucked up by bureaucracy."
Research published today from graduate-jobs.com found four out five graduates leaving university this year have work experience.
It found that of 20,331 students graduating in 2013, just 21.1% have no work experience on their CV as they begin their search for a career.
Gerry Wyatt, operations director at graduate-jobs.com, said, "Undertaking work experience is no longer an opt-in facet of the job application process, graduates need to take advantage of opportunities to gain real world experience of working life.
"The one in five graduates lacking work experience on their CV should take note."