Australian businesses are in the middle of a digital skills crisis. New research from RMIT Online and Deloitte Access Economics shows that the digital skills gap is costing Aussie companies a whopping $3.1 billion a year or $9 million a day. While closing the current digital skills gap would require a substantial $1.5 billion investment.

The report suggests that the gaps in digital competence are leading companies to miss out on new business opportunities, spend more money on outsourcing costs and experience reduced productivity.

Yet despite economic projections of a recession, 80 percent of business owners and leaders expect to hire at least as many employees this year as last year.

Investing in digital skills training for employees is essential

RMIT Online’s interim CEO, Claire Hopkins, said essential business owners understand the seriousness of the problem and are doubling down on training.

“It is essential for companies to invest in the capabilities of their employees if we start building an efficient, robust workforce. The demand for digital knowledge is only increasing, and if we do not take action to fill these gaps, companies will continue to suffer financially.”

Fortunately, companies seem to have embraced training as a way to keep staff motivated and engaged. Almost half (48 percent) of the surveyed employers give a preference retraining or retraining of existing employees, about hiring externally, because they believe that in-house solutions bring additional benefits, such as increased retention, strengthening team culture and greater cost-effectiveness.

Hopkins agrees, adding, “While paying upfront to learn and refocus our workforce may seem daunting, it’s clear that taking this proactive approach will yield huge savings in the future.”

Digital and soft skills are at the top of the list

While a third of employers believe workers should refresh their skills at least every three months, many workers cited barriers to training such as lack of time, high costs and lack of support from their employers. In addition, 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, “When companies underinvest in digital skills training it can lead to lost revenue, additional costs of outsourcing work to external staff or contractors, and reduced productivity. That is why training is an investment, not just a cost.”

The survey also found that companies expect continued demand soft skillswith employees citing leadership as the most critical skill in the next five years (27 percent) and employers citing communication and collaboration (14 percent).

The report also addressed the reasons why employees are attracted to a company and their reasons for leaving. While company culture is important to employees, the main reason for being attracted to a job is higher pay followed by flexible working hours. But when it comes to layoffs, workplace culture (33 percent) and feeling unappreciated by management (33 percent) were among the top reasons employees planned to quit their jobs.

Read more about the Ready, Set, Upskill report here.