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View all search resultsDigital skills and training key factors for success amid the pandemic
The impact of skill maintenance and development of employees in the digital space does not stop with digital innovation.
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T
he impact of COVID-19 on the Indonesian economic landscape has been profound with a drop in GDP of around 2 percent year-on-year for 2020. Around the world we have witnessed remarkable resilience among larger firms to the challenges as presented by the pandemic, e.g. in terms of the social distancing and lockdown directives from governments.
Research funded by the Australia-Indonesia Centre (AIC) and conducted on a panel of 200 IDX listed firms, found that employee digital proficiency as well as digital human capital investments (in the form of digital training) are key indicators of their sustained performance.
Firms lagging in employee digital proficiency (comparing low and high digital proficiency by a mean split) scored 11 percent lower on digital Innovation. This is problematic in an environment that requires swift and flexible approaches to implementing new digital products and services to overcome the hurdles presented by COVID-19 in terms of restrictions to trade.
However, there is a solution, firms that score low on employee digital proficiency are evidenced to offset initial deficiencies by engaging in digital training pathways. In fact, those firms scoring in the bottom 50 percent for digital proficiency can elevate their digital innovation efforts by as much as 13 percent through investments in their digital human capital through training.
Digital training (e.g. repurposing face to face sales staff to manage e-commerce activities or the training of employees to deal more efficiently with e-solutions such as track and trace procedures) then provides opportunities for firms that are traditionally less versed in the digital sphere and allows them to rapidly build digital capacities and meet COVID-19 induced market demands.
Importantly, the impact of skill maintenance and development of employees in the digital space does not stop with digital innovation. Digital innovation itself is evidenced to impact (industry adjusted) firm financial performance, with firms scoring high on digital innovation (comparing high to low digital innovation by a mean split) enjoying 10 percent higher performance.
In addition these firms also score 13 percent higher on their market facing adaptive response to COVID-19. This latter category shows that much of the digital efforts are geared at restoring the obstructed paths to market as caused by lockdown and social distancing. For instance, firms conducted higher levels of digital innovation will aim to respond closer to changing customer needs (e.g. e-commerce and delivery options) and associated required changes to products and service offerings.
