It said an overemphasis on exams and hitting targets has "robbed" young people of the chance to develop the soft skills employers are looking for.
Ahead of tomorrow's A-level results, the BCC is calling for a "rebalancing" of education to include greater contact between young people and business to help students make better career choices.
The BCC said in order to tackle the UK's youth unemployment problem the Government must not focus on exam results alone.
BCC director general John Longworth said businesses want to work with young people and there needs to be a "drastic" change of approach to make students work-ready.
"Businesses I speak to up and down the country want to work with young people and are happy to train and employ them," said Longworth.
"But they are often disheartened if not downright frustrated to find school leavers and graduates do not have the minimum skills they need to join the workforce.
They have poor literacy and numeracy skills, and behaviour and attitudes that don't meet business expectations."
The BCC will be meeting MPs after the summer recess to discuss ways Government can support employers to hire more young people now, as well as a more radical actions.
It said that without experience, young people are a risk for employers, and "accepting this reality" must be the starting point for MPs.
Lack of experience
Separate research published today from Pearson College and Ashridge business school found 31% of school leavers felt they didn't have the appropriate skills when starting their first full-time role.
In the study of 1,000 16 to 25-year-olds, more than 70% felt they lacked relevant work experience and 40% said not enough time was given to employability training at school, university or college.
Roxanne Stockwell, principal of Pearson College, said the survey shows a pressing need for higher education to link more closely to the professional world.
"High academic standards are vital, and our students will study many traditional business subjects as part of their degree, but this is not enough on its own," said Stockwell.
"This survey demonstrates that corporate engagement and the chance to develop a sophisticated understanding of the modern business world are also crucial. It is not a question of choosing one or the other - both are essential."
