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The digital skills gap is costing the Australian economy approximately $3.1 billion per year, with employers in prime position to help mitigate the issue.
Data shows that unemployment is at record lows of 3.5 per cent, and job postings are up 15 per cent from last year.
Economic growth may be slowing, but demand for workers is still rising, as 80 per cent of businesses are planning to hire as many people in 2023 as they did the year before.
RMIT released Ready, Set, Upskill: Prioritising Skills for a Resilient Workforce, which analysed the effects of talent shortages on digital skills. According to the report, digital skills are severely lacking, and this is having a negative effect on business success.
Around 40 per cent of the fastest-growing skills are digital-related, said RMIT, signalling that digital skills are the way of the future.
While soft skills are the most in demand for organisations, digital skills trail. RMIT found that communication, teamwork, and planning were the top three in-demand skills. Office productivity software knowledge came in fourth and is the most sought-after hard skill.
More than half of all businesses said their company lacked the necessary digital skills. According to RMIT, migration is up 171 per cent from 2021, yet we’re still seeing a severe lack of digital skills.
Skills shortages are costing the Australian economy a staggering amount of money.
According to the report, digital skills gaps are costing us $3.1 billion per year. Even more alarming is that RMIT said this cost is only associated with existing employees who lack skills and does not consider the costs associated with training new employees to fill skills gaps. This means the real cost is likely much higher.
Digital skills gaps bring hindrances to business success, including reduced productivity, higher costs, and lower revenue.
According to RMIT, 48 per cent of businesses were attempting to reverse the gaps through upskilling existing staff, and 52 per cent were hiring externally.
RMIT said there are pros and cons to either approach. Training can be more cost-effective and improve retention and engagement, but it can be ineffective and take much longer if not done properly.
Hiring can get the skills required quicker but can be much more expensive and difficult with current talent shortages. RMIT said that companies could expect to pay 18 per cent more for a new hire.
Money may need to be spent to address issues however, as RMIT said that $1.5 billion is needed to bring digital skills up to scratch through training. This is the equivalent of $885,355 per business.
Developing a learning and development budget for your company may be a great way to set aside money that is specifically used for upskilling and reskilling employees and easing the digital skills shortages.
Integrating training into workdays can also help to keep productivity up. Setting up a reward system may be beneficial, too, as it would keep engagement high.
When hiring externally, RMIT said that skills tests are important. According to the data, just one-third of businesses are implementing skills tests when recruiting. This means you may be hiring people who aren’t equipped to fill your struggling areas. Digital skills tests can assist in ensuring you’re getting the workers that are right for the job.
Around 1,000 employees and 400 employers across Australia were surveyed. To read the full Ready, Set, Upskill: Prioritising Skills for a Resilient Workforce, click here.
Jack Campbell
Jack is the editor at HR Leader.
