A new study by RMIT Online and Deloitte Access Economics reveals the digital skills gap is costing Australian businesses $3.1 billion every year. However, finding an effective remedy and closing the current digital skills gap would take a significant investment of $1.5 billion.
The study, titled Ready, Set Upskill: Prioritising Skills for a Resilient Workforce, analyses the current state of skills in Australia and the role of upskilling and reskilling in helping to meet the demand for skills. The findings provide a snapshot of the top skills demanded, broader business sentiment, and workforce trends among the surveyed sample of leaders and workers.
What were the findings of the study?
According to the study, the skills shortage impacts companies in several ways, including loss of business, increased outsourcing costs, and reduced productivity. However, despite predictions of slow economic growth and inflation impacts, 80 per cent of business leaders expect to permanently take on at least as many people in 2023 as they did last year.
To address the skills gap, almost half (48%) of surveyed employers prefer upskilling or reskilling existing employees, over hiring externally, as they believe internal solutions generate additional benefits such as increasing retention, strengthening team culture, and raising cost-effectiveness. In addition, employees who received promotions in the past year, on average, spent 50 per cent more time on training than those who did not receive a promotion.
The survey also revealed that 24% of employers consider the frequency of engagement in training, upskilling, or reskilling opportunities when promoting internally. Firms also foresee continued soft skills demand, with employees eyeing leadership as the most critical skill in the next five years (27%) and employers identifying communication and collaboration (14%).
The top attraction for employees is higher pay (16%), followed by flexible working hours (12%). As a result, employers report increased pay and remuneration is the most effective tool to attract new staff (21%), followed by offering greater location flexibility (17%) and hours (15%). On the other hand, the state of the workplace culture (33%) and not feeling valued by management (33%) are among the top reasons employees intend to leave their jobs.
What are RMIT Online’s thoughts on the survey?
Claire Hopkins, interim Chief Executive Officer of RMIT Online, says, “Now is the time for businesses to invest in skills and development capabilities if we are to grow a resilient and competitive workforce. As the demand for digital skills continues to grow, the cost to businesses will also grow if decisive action is not taken to address these gaps.”
“While the upfront cost to solve our upskilling and reskilling crisis may seem high, our research shows investing in training is necessary for Australian businesses to reap substantial and long-lasting benefits, and to mitigate the impact of the digital skills gap,” concludes Hopkins.
John O’Mahony, Partner at Deloitte Access Economics, says, “If businesses underinvest in digital skills training it can result in a loss of revenue, additional costs of outsourcing work to external staff or contractors and reduced productivity. That’s why training is an investment.”