A new study by RMIT Online and Deloitte Access Economics has revealed that the digital skills gap is costing Australian businesses $3.1 billion annually, but closing the current digital skills gap would take an investment of $1.5 billion.
According to the study, the skills shortage impacts companies in several ways, including loss of business, increased outsourcing costs, and reduced productivity. However, 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.
We spoke to Claire Hopkins, interim CEO of RMIT Online, to find out more about the digital skills shortage and what can be done to address this in an equitable way.
What does the skills gap, specifically for the tech industry, mean for our economy?
Technology is developing at an increasingly rapid rate and it’s difficult for the workforce to keep up. The digitisation of the Australian economy, accelerated by the pandemic, will continue to drive demand for increasingly complex digital skills such as artificial intelligence, cybersecurity, and machine learning. Recent commentary has also suggested the reopening of international borders will not be a silver bullet for Australia’s skill shortage crisis. As a result, the pool of skilled talent is getting increasingly smaller compared to the demand.
These skills gaps are costly for businesses. First, it impacts businesses’ capacity to generate returns from its labour, with employees taking longer to complete tasks, with a higher chance of making mistakes. Secondly, it can also impact businesses’ returns to capital, as without the right skills, employees aren’t able to use capital in the most efficient way possible, decreasing profits.
What decisive action should be taken to reverse this?
The solution requires government, businesses, education providers and individuals to all come together to continually deliver upskilling opportunities fit for the future of work. If we want to have a workforce equipped with the right capabilities, we must shift our perceptions of learning and adapt to employees’ needs.
Leaders must be considering how they can build capabilities internally through upskilling and reskilling learning solutions. But training done right isn’t always easy to deliver. Our Ready, Set, Upskill report also sets out various actions employers can take to help get the most out of training: by establishing a dedicated learning and development budget, dedicating time for regular learning at work, rewarding employees for undertaking training, and by testing job candidates’ skills before hiring.
Learning must be accessible through a range of modes (face-to-face, fully online, blended) to suit the learner, and new formats like short course qualifications in emerging areas create opportunities for working adults to acquire in-demand skills.
How can more women in tech change the skills gap and how do we encourage more women in tech roles?
Our research found when it comes to addressing skills gaps within organisations, employers were much on par between hiring new and upskilling to address their needs. But equitable access to training, development and mentoring is crucial to both close the digital skills gap and build a more diverse workforce.
Training can be an effective tool to enhance employee retention and engagement, but it needs to be delivered the right way in order to be effective, and it can take substantial time and resources for employees to develop skills that align to business needs. Training and upskilling will support the development of women in technical roles by providing equitable opportunities to build upon their skills.
At the same time, hiring externally is often effective in securing specific skills quickly, but businesses may need to pay a premium to attract staff with the skills they need. When hiring externally, it’s important to focus on recruiting based on the specific traits required to be successful in a role. This approach encourages employers to consider a different pool of talent, who may not have the formal qualifications or relevant experience, but whose values and core skills align to the job being advertised. Inclusive recruitment practices across the organisation and a rethinking of the hiring process when bringing new staff into an organisation can reinforce and systematise gender equitable practices to encourage more women in tech roles.