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Businesses are paying a steep price due to slow technology adoption, a new report showed, with daily losses clocking in at millions.
Digital skills gap is costing Australian businesses $3.1 billion annually, or $9 million per day, according to new research from RMIT Online and Deloitte Access Economics.
The report highlighted that the impact of digital skills shortage goes beyond the financial aspect.
According to the study, the skills shortage affects companies in several ways, including through loss of business, increased outsourcing costs, and reduced productivity.
Claire Hopkins, the interim chief of RMIT Online, said the report indicated that “now is the time for businesses to invest in skills and development capabilities”.
“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 if decisive action is not taken to address these gaps,” she explained.
Closing the current digital skills gap would take a staggering investment of $1.5 billion from large businesses, but Ms Hopkins said such an investment would be likely to pay off.
“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,” she stated.
When it comes to addressing the skills gap, nearly half of the employers surveyed (48 per cent) stated a preference for upskilling or reskilling their current employees, as opposed to hiring externally.
Respondents who preferred the approach said it will not only help to bridge the skills gap but also yield additional benefits such as improved staff retention rates, enhanced team culture, and greater cost-effectiveness.
Notably, the study showed that employees who received promotions in the past year spent, on average, 50 per cent more time on training than those who did not receive a promotion.
But while one-third of employers believe that employees should refresh their skills at least every three months, employees face several obstacles to training, including lack of time, high cost, and inadequate support from their employers.
Moreover, the most valuable types of training for employees were found to be mandatory on-the-job training, formal qualifications, and formal certifications.
And despite predictions of slow economic growth and inflation impacts, data showed 80 per cent of business leaders expect to hire at least as many people in 2023 as they did last year.
Companies 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 study also found that nearly one in four employers consider the frequency of engagement in training, upskilling or reskilling opportunities when promoting internally, and 21 per cent believe that increased pay and remuneration is the most effective tool to attract new staff.
This is followed by offering greater location flexibility (17 per cent) and hours (15 per cent).
For employees, workplace culture (33 per cent ) and not feeling valued by management (33 per cent) were cited as the top reasons for intending to leave their job.
Deloitte Access Economics partner John O’Mahony said that digital skills training should be seen as a long-term investment.
“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,” he concluded.
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