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The Employer Guide:

Addressing digital skills shortages

adressing digital skills shortages

Australia has an enduring shortage of skilled labour across many of its industries. Typically, businesses have been able to fill any gaps in the workforce by looking to skilled migrants. But that all changed when the country closed its borders in March 2020 in response to the COVID-19 pandemic. Suddenly, the numbers of non-Australian citizens migrating here plummeted, over half a million temporary migrants left, and the number of citizens and permanent residents allowed to return home was limited.

In our now very digital world, tech has become the backbone of our society. A recent research report, conducted by Deloitte and RMIT, states that 2.6 million workers require digital skills to perform their roles in Australia. This is equivalent to one in every four workers. However, digital skills were identified as the most likely to be lacking in a business – 38 percent of businesses surveyed said they lacked artificial and machine learning skills. Furthermore, one in five businesses stated their employees’ digital skills were out of date.

Digital skills are set to further increase in importance, and as such, there will be a growing demand for new people. But, with the lack of migrant workers, the fact that Australian businesses are poised for a potential great resignation, and an explosion of salary expectations, recruiting new staff can be a challenge!

To close the digital skills gap, upskilling can play a crucial role.

The digital skills deficit

An analysis last year by the National Skills Commission found that 1 in 5 occupations in Australia suffers from skill shortages.

The deficits are driven by many factors, some long-standing (e.g., Australia’s aging population and tradition for younger people to travel overseas) and others more recent and localised (e.g., high global demand for infrastructure workers in the wake of COVID-19, and the demand for tech workers outstripping training and skills investment).

The accelerating digitalisation of business will continue to shape the post-COVID19 landscape. Digital skills will be lacking, and the problem isn’t unique to Australia. According to insights acquired globally from Salesforce and RAND Europe, if the digital skills gap is not closed within 3-5 years, there will be impacts on:

  • Product development.
  • Design and innovation.
  • Customer experience and satisfaction.

As technology continues to disrupt labour markets, businesses have an important role to play in providing digital opportunities. And whilst during the pandemic, reskilling employees was a necessary short-term survival strategy, businesses need to move beyond this short-term approach. Upskilling is a longer-term investment in augmenting the knowledge, skills, and competencies to help employees advance their careers.

Digital trends are reshaping jobs

Through the growing use of digital tools in all jobs and new jobs in tech and data, jobs are becoming more digital. Tech and digital platforms are also changing how businesses and workers connect to perform jobs. Jobs that are more routine in nature like data collection and administration are increasingly being more streamlined or augmented using digital tools. Jobs that require more critical thinking such as accounting and teaching are being enhanced by digital technology. And entirely new jobs have emerged in areas like cyber security and data analytics.

A recent PM&C report has identified job categories with a relatively high share of new job titles and relatively strong growth in Australia. These include computer software programmers, ICT security specialists, and computer network professionals.

Creating a benchmark of skills in roles like these is critically important for the future of Australia and will enable organisations to trade competently with both local markets and the rest of the world. Let’s investigate how businesses can have enough people with enough of the right skills today and beyond.

Implementing an upskilling program

When employees are offered and encouraged to take advantage of upskilling opportunities, people metrics, such as employee engagement, retention, and productivity, also go up.

Employees want to have visibility and an understanding of future career opportunities. Provide them with information about the skills, competencies, and capabilities they need to get there. COVID caused many people to examine their personal and professional priorities. And we’ve seen that those businesses that cannot provide visibility and opportunities are liable to lose some of their great talents.

There are no ‘right’ ways to identify and implement upskilling programs, but from our experience and the clients we work with, we have seen the following initiatives work well. And they can certainly complement recruitment strategies.

1. Assess the needs of your business

The participating businesses in the Deloitte/RMIT research piece (mentioned above) stated that they spent, on average, equivalent to $1,833 per employee on training in 20/21. And most of these businesses anticipated this figure rising in the next year’s financial year.

But that’s not to say this is what you should use as a benchmark. Most importantly, before you even begin planning your budget, start by accessing the training needs of your business. Focus on researching where there are skill deficits. The different types of training needed to address these skills deficits will obviously have different associated costs.

2. Determine your training budget

Your training budget will vary based on your specific business training needs, but typically 2-2.5% of the company budget allocated to training is considered standard.

Once you do have a general idea of the budget required, be mindful and watch out for hidden costs associated with employee training. These include things like:

  • The employee’s time – time spent training cannot also be spent working – so calculate the loss in employee productivity. However long the training takes will determine how much productivity is lost.
  • Administrative costs – such as transportation, travel time, lodgings, meal expenses, etc.
  • Ongoing training.
  • Contingencies.

If bringing outside help into the workplace is proving too costly, consider:

  • Rolling out group training.
  • Finding trainers from within your company.
  • Host weekly or monthly events.
  • Start a mentorship program.

At the end of the day, training should be regarded as an investment rather than a cost. Set a clear ROI expectation at the beginning of the process, so the benefit of return outweighs the initial investment. Employees are an appreciating asset, they become more valuable with time. That’s why it’s smart to invest in upskilling talent, especially when sourcing new talent is both hard to come by and expensive.

3. Make digital skills available to everyone

Equip all your workers with the tools, knowledge, and skills to keep the innovation going. Programs/roadmaps/clear pathways need to be available, not only to those in your workforce but to future graduates too.

Companies need to think creatively about how they approach skills development. Building programs that provide people with exposure to the ‘real world’ allows them to engage with unique situations. Job-specific training should be designed to help with a seamless transition into industry.

Programs also need to outline the visibility of the opportunities. Lengthy training programs without an end in sight will lead to frustration amongst your employees. Identify clear milestones for performance measurement and outline what can be achieved at the end of the process.

4. Empower your employees to own their own career development

When you ask employees for input on upskilling efforts, use their ideas and then determine when and how to offer upskilling options that may apply towards both operational and talent development goals.

Implement a framework where employees, as well as managers, can evaluate their own performance against company measures. Employees will value the investment you have made in them – and they will care about their development.

If your organisation considers opportunities to upskill your employees, empowerment, engagement, and planning are critical. Listening to your employee’s needs and wants, then acting on them, will position you for future success.

In this 2-part article series, we look at how employers can approach many of the challenges relating to attracting skilled talent.

Did you catch Part 1?  A guide to recruiting new technical/digital talent


Where do we fit in?

As much as upskilling is an integral component to enable businesses to succeed in 2022, there will often be a need to bring in new talent for your IT team. Particularly if digital transformation or building a winning digital business is on your agenda.

With a pool of skilled local and international talent, we offer businesses in Australia fast and flexible solutions to meet their hiring requirements. Whether you require a single IT resource or you need to scale a team quickly, luvo Talent will make it happen.

Contact [email protected] to find out more.

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