Australian businesses suffer $3.1 billion annual loss due to the digital skills gap, reveals a study.
A recent study conducted by RMIT Online and Deloitte Access Economics has uncovered the alarming financial impact of the digital skills gap on Australian businesses, which costs a staggering $3.1 billion annually.
The study indicates that businesses suffer from loss of business, increased outsourcing costs, and reduced productivity due to the shortage of digital skills.
The study further suggests that an investment of $1.5 billion would be required to bridge the current digital skills gap.
Despite the challenges posed by slow economic growth and inflation impacts, 80 per cent of business leaders remain positive about their hiring plans for 2023, with plans to hire at least as many people as they did last year.
According to the study, the following findings were also revealed:
- When promoting internally, 24 per cent of employers consider the frequency of engagement in training, upskilling, or reskilling opportunities.
- Companies anticipate continued demand for soft skills, with employees identifying leadership as the most critical skill in the next five years (27 per cent), while employers identified communication and collaboration (14 per cent).
- Higher pay (16 per cent) was the top reason cited by employees for being attracted to a company, followed by flexible working hours (12 per cent).
- Employers reported that offering increased pay and remuneration (21 per cent), followed by greater flexibility in location (17 per cent) and hours (15 per cent), is the most effective tool to attract new staff.
- Workplace culture (33 per cent) and not feeling valued by management (33 per cent) are among the top reasons employees intend to leave their job.
Claire Hopkins, the interim CEO 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 unless decisive action is 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.
Employers prioritise upskilling existing staff
The survey also highlights that nearly half (48 per cent) of the surveyed employers prefer to upskill or reskill their existing employees rather than hiring externally to address the digital skills gap. They believe that internal solutions generate additional benefits such as increased retention, strengthened team culture, and raised cost-effectiveness.
The survey further reveals that employees who received promotions in the past year spent 50 per cent more time on training than those who did not receive a promotion. While a third of employers suggest that employees need to refresh their skills at least every three months, employees face barriers to training such as lack of time, high cost, and lack of support from their employers.
The survey also highlights that the most valuable types of training for employees are mandatory on-the-job training, formal qualifications, and formal certifications.
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