A new study by RMIT Online and Deloitte Access Economics reveals that the digital skills gap is costing Australian businesses $3.1 billion annually.
The study notes that the skills shortage is impacting companies in several ways, including loss of business, increased outsourcing costs, and reduced productivity.
And while 80 per cent of business leaders expect to hire at least as many people in 2023 as they did last year despite inflation and predictions of slow economic growth, it might not be enough to close the skills gap as the research noted that such efforts would take an investment of $1.5 billion.
“Now is the time for businesses to invest in skills and development capabilities if we are to grow a resilient and competitive workforce,” Claire Hopkins, interim CEO of RMIT Online, said. “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,” Hopkins added.
To address the skills gap, 48 per cent 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 relation to this, the research found that 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.
While a third of employers think employees need to refresh their skills at least every three months, employees cited barriers to training such as lack of time, high cost, and lack of support from their employers. The most valuable types of training cited by employees were mandatory on-the-job training, formal qualifications, and formal certifications.
“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,” John O’Mahony, Partner at Deloitte Access Economics, warned. “That’s why training is an investment, not just a cost.”
