The Employers and Manufacturers Association (EMA) says high truancy levels at school translate into the workforce when they join.
It comes after new research from the Education Review Office (ERO) found only three out of five students regularly go to school.
COVID-19 has badly disrupted attendance, but even before the pandemic, Aotearoa had lower attendance than other countries.
Attendance among students who were going to school regularly fell a huge 12 percent between 2015 and 2019, before the pandemic.
Ministry of Education data shows comparatively, New Zealand sits well below the likes of Australia, the United States and the United Kingdom for regular attendance, which is measured by the percentage of students who have attended more than 90 percent of the term.
EMA head of strategy advocacy Alan McDonald told AM on Thursday their data shows 55-60 percent of young Kiwis aren't work-ready when they join the workforce.
He added a number of their employers tell the EMA they would just like staff to turn up "two days in a row".
"We've got massive shortages right across all sectors right at the moment, manufacturing is one that is quite problematic, but where are we going to get these people from," McDonald told AM co-host Ryan Bridge.
"Where are we going to get the skills from, our immigration tap is turned down and we've got very low unemployment. So we haven't got these people coming through and to have them coming through and not being work ready exacerbates the problem."
Watch the full interview with Alan McDonald above.
