Skills gap 'damaging young and employers across Europe'
More than a quarter of European employers are struggling to fill vacancies at the same time as young people face high levels of unemployment, says research from McKinsey management consultants.
The international report warns of a mismatch between young people's skills and the needs of employers.
It accuses education providers of being "over-optimistic" about work skills.
McKinsey director Mona Mourshed said it was a "profound challenge for Europe".
European Commissioner for Education and Youth, Androulla Vassiliou, said the research "could not be more timely".
"In Europe the mismatch between what our education systems are delivering and the needs of employers is resulting in a serious skills shortage and damaging the aspirations of Europe's young people and, ultimately, our future prosperity," said Ms Vassiliou.
The study examines how employers in eight major European economies, including the France, Italy, Germany, Spain and the UK, are finding difficulties in recruiting staff while many young people are struggling to find jobs.
The report, Education to Employment: Getting Europe's Youth into Work, indicates 27% of employers have left "entry level" jobs unfilled because they could not find anyone with the necessary skills.
This skills shortage was causing "major business problems" for 33% of the employers surveyed.
The McKinsey report says this is against a background of "crisis level" youth unemployment, with 5.6 million young people, (up to the age of 25), without jobs in the European Union.
The biggest problems with youth unemployment are in southern Europe.
The study calls for a better alignment between the worlds of education and employment, warning that education providers have an inflated confidence in the relevance of what they are teaching.
While 74% of the education providers surveyed thought that young people were being equipped with skills for work, only 35% of the employers agreed that this was the case.
The research, which surveyed 5,300 young people, 2,600 employers and 700 education providers, also highlights a lack of engagement by employers in the education system.
The McKinsey study says it should be easier for young people to study for the skills they need or to go back for re-training.
This could include breaking up courses into smaller modules so that they can be studied more flexibly.
Technology from computer games could be used to help in training, it suggests.
Making sure that vocational and academic courses are affordable is important, says the report.
It also calls for better careers advice at school.
Ms Vassiliou said the European Union was "committed to playing its part" with funding for training projects.
"The report has a clear message. Policymakers, educators and business must all break out of their silos and work together more closely to avert what is a growing crisis," she said.