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Ready Set Upskill

Maximising the ROI of skills and training

This annual report series prepared by Deloitte Access Economics for RMIT Online analyses the current state of skills in Australia and the report of upskilling and reskilling in helping to meet demand for skills.

Fourth edition: Maximising the ROI of skills and training

Australian businesses are expecting to spend approximately $8 billion on learning and development in 2024. The expected spend on learning and development per employee reflects an increase of approximately 15% year-on-year.

This spending comes at a time when businesses face an uncertain economic outlook in 2024. While one-third (35%) of surveyed employers are pessimistic about the broader economic outlook, 30% are optimistic.

Despite training spend rising overall, one in eight Australian surveyed businesses are planning on spending less on learning and development in 2024 compared to last year. Modelling for this report finds that the fall in learning and development investment will mean missing out on skills valued at approximately $2 billion in 2024.

In an era of uncertainty, there is a strategic opportunity for businesses to make a robust assessment of their workforce skill needs, and tune-up their learning and development plan so employees have the skills they need for success. This report identifies four ways for businesses to increase their training budget’s return on investment.

Previous editions:

Australia’s job market is highly competitive, with unemployment reaching a record low of 3.5% and job postings up 15% year-on-year. Digital skills are a critical part of the Australia’s skills landscape, with job advertisements data indicating that four of the top ten fastest growing skills were digital skills.

While demand for digital skills remains high, supply can’t keep pace. Three in five surveyed businesses said their workforce lacked or had outdated digital skills. Modelling for this report estimates that existing digital skills gaps (such as those in data science analytics, cyber security tools, and coding) are costing large Australian businesses $3.1 billion each year, equivalent to roughly $9 million a day.

To address this digital skills gap, large Australian businesses would need to spend $1.5 billion on digital skills training. This reflects the cost to solve current skills gaps, however training would need to be undertaken each year to ensure Australian workers maintain their digital capabilities.

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In this edition of Ready Set Upskill, Deloitte Access Economics explores the state of the labour-market in the recovery from COVID-19.

Over half of employers surveyed (58%) found it challenging to attract new staff, identifying border closures as the most common barrier (27%). The fall in skilled immigration since the COVID-19 pandemic saw 380,000 fewer people enter the workforce, with this report estimating this cost the Australian economy was $32 billion.

The research shows digital skills are becoming essential across all work areas. 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. The analysis found that, on average, the premium was 9% or the equivalent of an additional $7,700 per worker every year.

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The digital skills gap shows that few Australians are ready for the jobs of tomorrow. One in four Australians felt they didn’t have the skills they need, and a similar proportion were worried about being made redundant. Already, 50,600 Australians reported lacking necessary skills or education as their main difficulty in finding work.

If Australia can address the digital skills gap, it will turbocharge the economy, helping businesses in the Technology, Media and Communications industry alone grow by $10 billion by 2025.

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