More than half of businesses paid for remedial training in basic skills over the past year, despite research claiming the multi-billion pound investment is almost worthless to the economy.
The Confederation of British Industry's annual survey of employers' views on skills found that 40 per cent were worried about literacy, numeracy and the information technology abilities of their staff.
Employers said basic skills training was vital. More than half of them paid for courses over the previous 12 months in addition to the Skills for Life programme, according to the CBI report.
The retail industry reports the biggest concerns, with 69 per cent of companies saying staff had problems with maths and 52 per cent saying their literacy was below par. But the main concern for employers across all industries is the level of IT skills, which are considered to be too low in 57 per cent of firms.
Richard Wainer, the CBI's head of education and skills, said poor literacy and numeracy were reckoned to cost the economy Pounds 2.5 billion a year, so anything that reduced the problem was valuable.
"Employers do expect the education system to ensure that people entering the labour market are literate and numerate to a functional level. There is a lot of frustration out there among businesses that have to pick up the pieces," he said.
"But we are not living in a perfect world and there are a lot of adults in our members' workforce who have problems with literacy and numeracy. They say it's important to address those concerns."
Progress in basic skills helps staff communicate and work together, improve their customer service and cut out errors in simple tasks such as counting out change, he said.
But research by Anna Vignoles, of the Institute of Education at London University, found that adult basic skills had not increased productivity and earnings.
"It is well known that an individual's basic skills level affects how much they earn, but research shows the three Rs are best acquired in childhood," she said. "Policies and qualifications to help adults develop them have proved largely ineffective. The array of low-level qualifications available to adults has not boosted productivity and earnings. Gains from workplace courses are particularly small."
The National Audit Office found last year that 1.5 million adults had been helped to reach basic literacy and numeracy standards by 2007 as a result of the Pounds 5bn investment in Skills for Life.
But Dr Vignoles said the UK still languished in the bottom half of international league tables for basic skills compiled by the Organisation for Economic Co-operation and Development.
Niace, the adult education body, said it was a myth that millions of adults were illiterate or innumerate, although many struggled with some aspects. Short courses had helped thousands develop the skills and confidence they needed, it said.