Published on the 09/03/2023 | Written by Heather Wright

Both workers and organisations are reaping the benefits of investing in digital skills with local workers with ‘advanced’ digital skills including software and application development, cloud architecture and AI or machine learning, earning on average up to 24 percent more than ‘non-digital’ counterparts – and reporting more job satisfaction.

The report, from an extensive survey by Gallup commissioned by AWS, also found businesses relying heavily on advanced digital skills are reporting higher revenues while cloud technology adopters report higher levels of both revenue growth and innovation.

“Despite hiring challenges companies are maintaining degree requirements, even for entry-level IT staff.”

While that’s not unexpected, the report does put figures to the claims – and the difference, at least when it comes to revenue gains for Australian organisations employing workers with advanced digital skills, aren’t small at 400 percent higher than those who employ workers with only basic digital skills (defined by Gallup as using email, work processes and other office productivity software and social media). New Zealand’s figures, at 67 percent, were less stunning, but still welcome for companies.

The cloud factor is at play. The report finds that 27 percent of New Zealand organisations that run most of their business on the cloud report a doubling of annual revenue, while more than 60 percent of Australian organisations running some or most of their business on cloud report revenue growth of 10 percent or more.

In both countries, cloud-based organisations are more likely to have introduced a new or improved product within the last two years.

More than 30,000 workers across 19 countries, including more than 2,000 workers and 775 employers in Australia and nearly 1500 workers and 374 employers in New Zealand, were surveyed in what Gallup claims is one of the largest international surveys on digital skills to date.

Just like the recent IDC report into the public cloud ‘dividend’ which forecast increasing adoption would add $21 billion in new revenue for New Zealand by 2026 and more than $114 billion in Australia, the Gallup report says advanced digital workers are adding significantly to the local economies.

It claims A$41 billion is being added to Australia’s GDP, and NZ$7.3 billion to New Zealand’s GDP, through advanced digital workers higher income and productivity. That’s in part thanks to the income premiums generated via digital skills – Australian workers with advanced digital skills are reaping 24 percent higher earnings than those with similar education and experience who aren’t using digital skills, while in New Zealand the figure is slightly lower at 19 percent.

Interestingly, the Australian report shows women in Australia make income gains when they use any level of digital skills at work, with even basic skills leading to higher median salaries than their non-digital skilled counterparts (AU$42,000 vs $25,000) in a trend that continues as skills progress. Male workers on the other hand, only see a salary benefit when they use intermediate or advanced skills at work. Similar trends weren’t noted in the Kiwi report.

Job satisfaction 

For individual workers as well as the pay benefits came a boost in job satisfaction, with 65 percent of Australian advanced digital workers and 72 percent of Kiwi advanced digital workers expressing high job satisfaction.

Apparently even taking some digital training can have benefits, with nearly half of those undergoing training in the past year saying it increased their work efficiency, with around a third saying it improved their employability and increased their opportunities for promotion.

But while those advanced digital skills are paying, New Zealand and Australia are bringing up the rear in how big a premium individuals can command. The income gap between digital and non-digital workers is noticeably lower in Australia and New Zealand than the APAC average of 65 percent. That’s something the report suggests is likely the result, at least in part, of the industries non-digital workers are employed in. Australia’s ‘non-digital’ mining sector workers, for example, have the highest average salary of any industry in Australia at AU$2,700 a week according to May 2022 data from the Australian Bureau of Statistics.

(As a side note, while intermediate and basic digital skills workers also earn more than non-digital counterparts, APAC-wide, at 57 percent and 39 percent, respectively in Australia, workers using basic digital skills actually earn 10 percent less than non-digital peers, something attributed to the impact of higher pay for workers in construction, manufacturing and mining sectors who don’t use computers in their job.)

Jonathan Rothwell, Gallup principal economist, says the research shows the ‘immense’ economic value digital skills provide to New Zealand and Australia at the individual, organisational and macroeconomic levels.

The skills shortage issue

But, as with so many reports before it, it also shows a key issue both countries are facing.

“As more organisations move their IT to the cloud over the next decade and new technologies emerge, digitisation is going to fuel a vast number of new jobs,” Rothwell says.

“The opportunity… to be competitive in the digital economy depends on having a robust and highly skilled workforce to support current and future innovations.”

Seventy-three percent of Australian employers, and 69 percent of Kiwi employers reported that they’re looking to fill openings requiring digital skills. Seventy-one percent of Australian and 64 percent of New Zealand employers, said they’re struggling to do so, with the struggle in Australia more intense for those in the public sector.

Vacancy rates for tech jobs in Australia are 60 percent higher than the national average and forecast to grow at triple the rate, according to the Tech Council of Australia.

But the Australian report notes that despite hiring challenges, 27 percent of companies are maintaining bachelor’s degree requirements, even for entry-level IT staff, while in New Zealand, its demand for previous work experience that wins out.

In New Zealand, where 4,000 to 5,000 new technology workers are currently needed each year, most of the roles are for experienced individuals who are in short supply. The country’s over-reliance on the international talent pool and lack of internal upskilling, became very clear during the pandemic, when those pipelines were shut off.

Ironically, the report shows New Zealand companies continue to favour digital workers from abroad who have work experience.

Yet in both countries workers surveyed overwhelmingly expressed interest in upskilling. Asked how interested they would be in training in each of the 26 skills, ranging from productivity software to AI and programming, workers in both countries were interested, on average, in training for seven skills.

Employers across both countries reported issues of losing qualified applicants to other countries.

The New Zealand report notes a different challenge: While 43 percent say a shortage of skilled people is the key obstacle, almost as many – 39 percent – say they have enough qualified applicants but lose them to other companies.

And those skills? In New Zealand it was digital software, cloud-based tools, online marketing and database administration, while in Australia productivity software, cloud-based tools and database administration won out.

Those responses might hint at future problems.

The study also looked at employers views on 10 emerging technologies, including AI, edge and quantum computing, the metaverse, blockchain and cryptocurrency.

Appetite for the new technologies was higher in Australia, where 66 percent of employers said it was highly likely at least one emerging technology will become part of their operations. In New Zealand, it was a more subdued 51 percent – 15 percentage points behind both Australia and the global average.

For both countries, it’s the less ‘sexy’ offering of 5G which is piquing most interest.