Institute of Directors (IoD) director general Simon Walker said his organisation was "astonished by the irresponsible rhetoric and pandering to anti-immigration sentiment from the home secretary".
"It is yet another example of the home secretary turning away the world’s best and brightest, putting internal party politics ahead of the country, and helping our competitor economies instead of our own," Walker added.
Addressing conference delegates in Manchester, May said that there was "no case in the national interest for immigration of the scale we have experienced over the last decade".
"When immigration is too high, when the pace of change is too fast, it’s impossible to build a cohesive society," she said. "It’s difficult for schools and hospitals and core infrastructure like housing and transport to cope."
May added: "We know that for people in low-paid jobs, wages are forced down even further while some people are forced out of work altogether."
But Walker sharply rejected May's claims that immigration is leading to unemployment among UK workers, saying: “The myth of the job-stealing-immigrant is nonsense. Immigrants do not steal jobs, they help fill vital skill shortages and, in doing so, create demand and more jobs.
"If they did steal jobs, we wouldn’t have the record levels of employment we currently do," he added.
The national jobless rate is currently 5.5 per cent.
Tim Thomas, head of employment and skills policy at manufacturing trade body EEF, warned that May's "anti-immigration rhetoric" was coupled with "penalising businesses who need to recruit skilled employees from outside of Europe".
“Manufacturers make significant use of migrant labour, as well as intra-company transfers, and those in such roles provide a positive tax and economic benefit," Thomas said.
“Choking off this supply of skilled labour only serves a target driven approach which will do little to address the UK's underlying need for skilled migrant labour whilst, at the same time, training our home-grown workforce."