Mr Percival said there were concerns that new recruits won’t be given “a chance” if the day one rights are too rigid.
He said: “I don’t find that anyone is saying to me ‘we need two years’ but people get nervous when it comes down to 12 months.”
He added: “The hard reality is that companies are already struggling to keep up with the pressures on their bottom lines, especially SMEs, and that further pressure from employment costs will inhibit their ability to invest, hire and grow.
The CBI said that the “main change in perceived future threats to competitiveness” were rules on flexibility, which 58pc of businesses think will impact competitiveness in the next five years.
The Government has proposed giving workers the rights to ask for flexible working arrangements from day one and to push for a four day week.
The flagship package of measures designed to boost employee rights also includes ending zero-hour contracts, banning “fire and rehire” practices and increasing the minimum wage.
The CBI said that only 26pc of businesses are currently confident they can absorb the cost of the Government’s plans without a negative impact on growth, investment, jobs or employee benefits.
Mr Percival said the lack of detail about how the workers rights reforms would work in detail had created “damaging uncertainty”.