The demand for skills from employers is inversely proportional to the supply of courses from further education institutions, a careers guidance conference has been told.
While colleges concentrate on providing basic computer courses and on literacy and numeracy, these skills are the least demanded by employers.
Technical skills top the table of skills demanded by employers, but college courses in these are at the bottom of the supply list.
These startling statistics were revealed by Chris Humphries, director-general of City and Guilds, at the first conference given by Careers England, the new trade organisation for people in the careers guidance services.
He said colleges were providing courses based on demand from students, not from employers, and this was causing the imbalance.
"The skills demand is directly opposite to the supply. Does this suggest that people are not getting the best guidance?" he added.
"Providers are responding to requests made on them by learners. Is a failure of guidance happening in the system?"
He said young people are taking advice on careers paths from parents, teachers, and their peers who may not be up to date with what the jobs market needs.
He described the use of information about the labour market as "woeful". He said: "We spend pound;80 million a year on labour market information that is not used properly."
There is still a long way to go, he added, before reaching the government target that by 2010, 65 per cent of the workforce will have a level 3 qualification (A-level or equivalent), up from the current 43 per cent.
Sir Geoffrey Holland, chairman of the Learning and Skills Development Agency, said forecasts suggested that two million extra jobs would be needed by 2010, the majority of which will require a level 3 qualification.
But he said there will be only 600,000 young people coming on to the labour market in that time.
"Where are the people going to come from for a level 3 plus world?" he asked.
Ruth Spellman of Investors in People, stressed the importance of winning the argument with employers that training their staff will give them with a competitive edge.
She said: "Employers are waking up and taking action because they see the advantages of having a trained workforce in meeting business objectives.
"Around 43 per cent of all learning by adults is done at work. It is really important to drive up the quality of that learning."
Frances O'Grady, deputy general secretary of the Trades Union Congress, told the conference that "an increasing number of workers are overqualified for the work they do". She said: "They feel disillusioned and unchallenged.
Perhaps we need to pay attention to the fact that the jobs on offer fall short of their expectations too.
"Over the past 10 years, survey after survey suggests that levels of job satisfaction have plummeted. Millions of people dread it when the alarm goes off on Monday morning.
"Historically the lion's share of career development opportunities have gone to those who already have the skills, the training, the education, and those who don't are left with the scraps."
She said only one in 20 low skilled employees is offered training by their employer, compared to a quarter of employees with degrees.
In recent years, she told the conference, the TUC has begun to place union learning representatives in the workplace and there are now 7,000 offering support and confidence-building to low skilled staff.