Schools offering substandard careers advice should be downgraded in Ofsted inspections, MPs have said.
Poor careers provision in England's schools was depriving young people of the chance to consider job options and harming the economy, the MPs said.
Ministers must incentivise improvement, the Commons Sub-Committee on Education, Skills and the Economy concluded.
But head teachers' leaders said a "big stick" would not solve "severe problems" in the careers advice system.
The report says: "We recommend that Ofsted introduce a specific judgement on careers information advice and guidance for secondary schools, and set clear criteria for making these judgements.
"The Common Inspection Framework should be amended to make clear that a secondary school whose careers provision is judged as 'requires improvement' or 'inadequate' cannot be judged as 'outstanding' overall.
"Likewise a secondary school should be unable to receive an overall judgement of 'good' if its carers provision is judged to be 'inadequate'."
The report, the first from the sub-committee, which was set up last year, also urges the government to untangle the "unruly" and "complex" web of organisations, service providers and websites overseeing and offering careers advice and put a single minister in charge.
It adds that a host of policy changes, initiatives and new bodies introduced in recent years have failed to make serious improvements in careers advice and "some have proved counterproductive".
"Too many young people are leaving education without the tools to help them consider their future options or how their skills and experiences fit with opportunities in the job market," says the MPs.
"This failure is exacerbating skills shortages and having a negative impact on the country's productivity."
They want better work experience for all young people and urge up-to-date local information be provided to schools and colleges from businesses through Local Enterprise Partnerships.
Neil Carmichael, who chairs the Education Committee, said it was "concerning that so many young people are being failed by the guidance they receive".
"Careers advice should be a core part of a young persons schooling - but at the moment it is little more than a poorly thought out add-on," he said.
Iain Wright, who chairs the Business, Innovation and Skills Committee, said initiative after initiative on careers guidance had "rained down from government, creating a confusing and costly mess when what we really need is a clear picture".
The report says the imminent publication of the government's new careers strategy would be a good opportunity to "finally get careers provision right".
But Malcolm Trobe, interim general secretary of the Association of School and College Leaders, said it was "disappointing that the committee had reached for the big stick of Ofsted".
Severe problems in the existing careers system urgently needed sorting out and school budgets were frozen and under severe pressure, said Mr Trobe.
"We agree that high-quality careers advice is vital to young people and the economic future of the country, but it is pointless to introduce yet another accountability measure without first addressing these problems," he said.
And Russell Hobby, general secretary of the National Association of Head Teachers, said the "blunt tool of inspection" was not an effective way to drive improvement in careers guidance.
Education and childcare minister Sam Gyimah said ministers were aware of huge variations in careers guidance.
Mr Gyimah promised the government's careers strategy, to be published later this year, would "provide a roadmap" for improvement.