Australian firms' training cuts costing AUD $3.1 billion annually

A report by RMIT Online and HiBob reveals that Australian businesses fail to address declining productivity and skills shortages due to reduced investment in employee training.

The report "Skills of Tomorrow" shows that a significant portion of Australian office workers are dissatisfied with current training opportunities, with 28% expressing unhappiness regarding their employers' recent training and upskilling options. This dissatisfaction is rising amidst a backdrop of over a third of Australian occupations facing skills shortages.

Digital skill deficits alone cost the Australian economy AUD $3.1 billion annually, making it critical for businesses to reassess their training investments. Notably, 18% of employees report a decline in both the quality and quantity of training over the past year, which parallels the broader trends of slowing economic growth.

The report indicates that a lack of training opportunities contributes to declining workplace productivity, which has not improved significantly since 2016. This leaves the average Australian AUD $25,000 a year worse off than in the 1990s. Approximately 15% of office workers have started to care less about their jobs due to their employer's inadequate investment in training, potentially undermining productivity further.

Damien Andreasen, VP of APJ at HiBob, comments, "In tough times, cutting training is a big mistake. Doing so can lead to a disengaged workforce, which then leads to lower productivity and higher turnover. HR leaders understand the value of tailored learning programmes that address skills gaps and how it can be a force multiplier in developing talent. The challenge lies in getting executive leadership to prioritise the investment during a soft economy in which they scrutinise every dollar."

Additional insights from the report showcase that almost half of the Australian workforce values ongoing training as pivotal for career growth, while more than half associate training with greater competitiveness in their roles. Continuous training is also emphasised, with 55% of workers considering it essential to keep up with industry changes.

Workers have identified their priorities for skill development, with 47% seeking further training in digital and IT competencies, followed closely by entrepreneurial (46%) and interpersonal (44%) skills. Employees underscore the importance of a structured approach to learning, with half stating that time allocated for training should be part of working hours and performance reviews should incorporate discussions about completed and future training needs.

Kade Brown, Workforce Solutions Director at RMIT Online, states, "Australia is facing a significant skills shortage, but companies can control one thing: workforce upskilling. Upskilling has a strong return on investment when aligned to skill areas that are strategically important to the organisation. Modern online courses are practical, engaging, and fit seamlessly into today's work routines. Plus, short courses from top Australian institutions generally come with robust skills-based assessments so you can feel assured that they're driving the right new behaviours on the job."

Andreasen further remarked, "HiBob and RMIT Online's report shows the need for a smarter approach to workforce training. Employees don't just want any training — they want programmes that address skills gaps and help them outperform the ongoing challenges in their market be it AI, soft economic conditions or increased competition."

"In many organisations, learning is simply code word for compliance training and process orientation, which couldn't be more disconnected from the realities of the modern workforce. To succeed in this market, businesses need to rethink their training strategies to boost engagement, retention, and ultimately, performance."

The findings are based on a September 2024 survey of 2,000 office workers conducted by Pollfish, a global research company.