New study shows digital skills gap costs Australian businesses $9 million a day

Australian businesses are in the midst of a digital skills crisis with new research by RMIT Online and Deloitte Access Economics revealing the digital skills gap is costing Aussie businesses a whopping $3.1 billion annually, or $9 million a day. While closing the current digital skills gap would require a substantial investment of $1.5 billion.

The report suggests that the gaps in digital competency are causing businesses to miss out on new business opportunities, spend more money on outsourcing expenses, and experience reduced productivity.

Yet despite economic forecasts of a downturn, 80 per cent of business owners and leaders expect to hire at least as many employees this year as they did last year.

Investing in employee digital skills training essential

Interim CEO of RMIT Online, Claire Hopkins, said its essential business owners grasp the severity of the issue and double down on training.

“It’s essential for companies to invest in their employees’ capabilities if we’re going to build an efficient, robust workforce. The demand for digital savvy is only increasing, and if we don’t take action to fill these gaps, businesses will continue to suffer financially.”

Fortunately, businesses seem to have embraced training as a way to keep staff motivated and engaged. Almost half (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.

Hopkins agrees, adding, “although paying up-front to learn and refocus our workforce may seem daunting, it is obvious that taking this proactive approach now will result in immense savings down the road.”

Digital and soft skills top the list

While a third of employers think employees need to refresh their skills at least every three months, many employees cited barriers to training such as lack of time, high cost, and lack of support from their employers. Additionally, 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, 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, not just a cost.”

The study also revealed businesses anticipate a continued demand for soft skills, with employees identifying leadership as the most critical skill in the next five years (27 per cent) and employers identifying communication and collaboration (14 per cent).

The report also delved into the reasons employees are attracted to a company and their reasons for leaving. Despite business culture being of importance to employees, the number one reason cited for being attracted to a job, is a higher wage followed by flexible working hours. But when it comes to quitting, workplace culture (33 per cent) and not feeling valued by management (33 per cent) are among the top reasons employees intended to leave their job.

Find out more about the Ready, Set, Upskill report here.