A recent study by RMIT Online and Deloitte Access Economics revealed that Australian businesses are losing $3.1 billion annually due to the digital skills gap.
However, the study also suggests that an investment of $1.5 billion could help close this gap.
The skills shortage has impacted companies in various ways, including reduced productivity, increased outsourcing costs, and loss of business. Despite predictions of slow economic growth and inflation impacts, 80% of business leaders expect to hire at least as many people in 2023 as they did last year.
According to Claire Hopkins, interim CEO of RMIT Online, businesses need to invest in skills and development capabilities now to grow a resilient and competitive workforce. As the demand for digital skills continues to grow, it is crucial to address these gaps, or the cost to businesses will only increase.
“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.
Almost half (48%) of surveyed employers prefer upskilling or reskilling existing employees over external hiring to address the skills gap. They believe internal solutions generate additional benefits, such as increased retention, stronger team culture, and higher cost-effectiveness.
On average, employees who received promotions in the past year spent 50% more time on training than those who did not receive a promotion. However, a third of employers believe employees need to refresh their skills at least every three months, while employees cited lack of time, high cost, and lack of employer support as barriers to training. The most valuable types of training for employees were mandatory on-the-job training, formal qualifications, and formal certifications.
John O’Mahony, Partner at Deloitte Access Economics, emphasizes that underinvestment in digital skills training can result in a loss of revenue, increased outsourcing costs, and reduced productivity. Therefore, training is an investment rather than just a cost.
The study also found that 24% of employers consider how frequently their employees engage in training, upskilling, or reskilling opportunities when promoting internally. Furthermore, companies anticipate a continued demand for soft skills, with employees identifying leadership as the most critical skill in the next five years (27%) and employers identifying communication and collaboration (14%).
When it comes to attracting employees, the top reason cited by employees is higher pay (16%), followed by flexible working hours (12%). Employers, on the other hand, believe that increased pay and remuneration is the most effective tool to attract new staff (21%), followed by offering greater location flexibility (17%) and hours (15%).
Finally, workplace culture (33%) and not feeling valued by management (33%) are among the top reasons employees intend to leave their job.
For more information, read the report here: online.rmit.edu.au/insights.
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