Too many young people lack the social skills needed to get their first job, says a report on the issue of "Neets".
The Work Foundation says more than 450,000 Neets - youngsters not in education, employment or training - have never had a regular job.
Report author Paul Sissons says young people can lack the "soft skills" needed for the jobs available to them in the service sector.
He says youngsters need help at "this crucial point of transition".
The report from the Work Foundation think tank warns of a long-term problem of Neets - aged between 16 and 24 - who have never successfully made the first steps from education into employment.
It suggests that first jobs are now increasingly unlikely to be in manufacturing - but instead will be in the service sector.
But it warns that too many youngsters in this Neet category lack soft skills - such as "communication, team working and customer service" - to get a start in such jobs.
"We know that if young people haven't got on to the first rung of the job ladder by 24, they will suffer the consequences for the rest of their lives," said Shaks Ghosh, chief executive of the Private Equity Foundation, which supports the report.
"Some will never work. That's why this research is so shocking.
"Many Neet young people face a Catch-22. They don't have the so-called 'soft skills' employers are looking for, but often the only opportunity to learn those skills is on the job," he said.
The report, Lost in Transition, says that the growing number of Neets reflects a major shift in the labour market in the past decade, which has caused a mismatch between the jobs available and the skills of those who are out of work.
It means that more than half of Neets will never have had any sustained experience of a job.
Approaching a million youngsters are classified as Neet - with updated figures expected to be published this week.
Dr Sissons says such youngsters need "personalised guidance, workplace mentors and introductions to business networks, as well as work experience which leads to paid employment".
Earlier this week the Organisation for Economic Co-operation and Development (OECD) launched a Skills Strategy to address this problem on an international level.
The OECD has warned about the problems of people in industrialised countries isolated from the labour market by a lack of skills.
Even when there are job vacancies, the OECD has reported problems faced by employers who are unable to find suitably-qualified candidates.
The OECD argues for a more co-ordinated approach between education authorities and employers to prepare people for the skills likely to be needed in the future.