Demand creates a digital skills wage premium

More than half of Australian workers have recently taken steps to change their current employment, according to a new report.

The Ready, Set, Upskill — Fast track growth with digital skills report, produced by RMIT Online and Deloitte Access Economics, was developed from interviews with 413 business leaders and 1040 employees from mid-size and big companies across several Australian industries. According to the report, more than 56% of surveyed employees have recently taken actions including looking at job opportunity listings, preparing their CV, sitting an interview or reaching out to their network.

“It’s no secret that employers across Australia are struggling to find great people with the right skills,” said Helen Souness, RMIT Online’s CEO.

“In some industries, such as technology, big companies are raising salaries to attract talent and making it even harder for smaller businesses and startups to hire. We need to increase upskilling and open the borders to change this situation.”

Intent won’t necessarily lead to action

Despite the interest of employees in moving on, employers do not expect half of their workforce will resign in 2022. One-third of companies surveyed anticipate that 6–10% of their current staff will leave, while around one-quarter expect to lose between 11 and 20%.

Over half of employers surveyed (58%) found it challenging to attract new staff, identifying border closures as the most common barrier (27%). In addition, employees looking for their dream careers (26%) and having extremely high work–life balance standards (24%) created significant hurdles attracting new workers.

Businesses are betting on flexibility and training to attract potential candidates and make current staff stay put. The majority (72%) now offer flexible work arrangements and on-the-job formal training initiatives, with coaching and paid leave also popular perks.

Workers value this investment in training, with 77% saying it demonstrates employer interest in their career development. Most managers (82%) believe upskilling staff will be critical for business performance this year.

But despite the high importance given to training, more than three quarters (77%) of managers say their organisations could do more to upskill staff, and 61% think they would be willing to increase investment if they expected fewer people to resign.

Big gap and wage premiums

The survey also reveals that the fall in skilled immigration since the pandemic started in March 2020 saw 380,000 fewer people enter the workforce, directly costing the Australian economy $32 billion. The study calculates that Australia’s GDP could have grown by an additional $148 billion during this period without the pandemic impacts.

The research shows digital skills are becoming essential across all work areas. Analysis of job advertisements in 2021 revealed that these skills were the third most requested, behind customer service and project management and ahead of core areas like sales, budget management and business processes. Close to two in five companies surveyed (38%) also said they lacked artificial intelligence and machine learning skills. Roughly one in five companies (21%) revealed their employees’ digital skills are out of date.

The demand for digital skills has created a digital wage premium. The research compared the advertised salaries within occupations where they had explicitly requested digital skills to the average advertised salary more broadly to determine the digital skills premium. The analysis found that, on average, the premium was 9% or the equivalent of an additional $7700 per worker every year.

“Upskilling will play a crucial role in closing the skills gaps,” said John O’Mahony, Partner at Deloitte Access Economics.

“Employers anticipate they will spend more on upskilling over the next year and employees value this investment, with many noting that it is a sign their employers want to invest in them and they care about their development.”

Image credit: ©stock.adobe.com/au/snowing12