The integration of new technologies and digitalisation causing significant changes in the skills demanded, leading to skills shortages and skills gaps in digital context. Undoubtedly, the employees’ digital skills and knowledge need to be aligned with the ongoing technological changes. This study obtains inputs from the employers from professional services sector regarding the demand for digital skills and the existence of gaps in digital skill among the employees. The impact of digital skills and willingness to pay for the micro-credential on the employability was investigate. 308 responses from the employers reside in Klang Valley, Johor and Penang collected via online survey. The five areas of digital skills adopted from Digital Competence 2.0, and the pair-sample t-test in SPSS was used to identify the present of skill gaps. Besides, PLS-SEM was used to test the hypotheses with regard to impacts of digital skills and micro credential on employability. The findings indicate that problem-solving and safety skills were ranked as highly demanded digital skills in the future. The skill gaps were found in all areas of digital skills except information and data literacy. The employers agreed that digital skills did affect their decision in hiring the graduate employees and they are willing to pay for micro-credentials to address the skills gaps. Yet, willingness to pay for micro-credentials did not affect the employability directly and indirectly. This study provides insights into the demand of digital skills and the digital skills gaps. Implications of the study from theoretical and practical perspectives are discussed.

Abbasi, F. K., Ali, A., & Bibi, N. (2018). Analysis of skill gap for business graduates: managerial perspective from banking industry. Education + Training, 60(4), 354–367. https://doi.org/10.1108/et-08-2017-0120

Aidah, A. K., Kamariah, A. B., & Parilah, M. S. (2019). Strategic university practices in student information literacy development. Religación: Revista de Ciencias Sociales y Humanidades, 4(18), 9–15.

Akkemans, J., Tims, M., Beijer, S., & De Cuyper, N. (2019). Should employers invest in employability? Examining employability as a mediator in the HRM-commitment relationship. Frontier in Psychology, 10(717), 1–10. https://doi.org/10.3389/fpsyg.2019.00717

Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1016/S0742-3322(00)17018-4

Bastian, O. A., Rahmat, H. K., Basri, A. S. H., et al. (2021). The urgency of digital literacy in counteracting radicalism in the millennial generation in the era of the Industrial Revolution 4.0 (Indonesian). Jurnal Dinamika Sosial Budaya, 23(1), 126–133. http://doi.org/10.26623/jdsb.v23i1.1698

Becker, G. S. (1993). Human capital: A theoretical and empirical analysis with special reference to education. University of Chicago Press.

Bennett, D. (2018). Graduate employability and higher education: Past, present and future. HERDSA Review of Higher Education, 5, 31–61.

Capone, M. (2019). Data skills and the fourth industrial revolution. Available online: https://www.forbes.com/sites/forbestechcouncil/2019/05/03/data-skills-and-the-fourth-Brownindustrial-revolution/?sh = 2af22c32509d (accessed on 6 March 2024).

Caruso, L. (2018). Digital innovation and the fourth industrial revolution: Epochal social changes? A.I. and Society, 33(3), 379–392. https://doi.org/10.1007/s00146-017- 0736-1

Castaño-Muñoz, J., & Rodrigues, M. (2021). Open to MOOCs? Evidence of their impact on labour market outcomes. Computers and Education, 173, https://doi.org/10.1016/j.compedu.2021.104289.

Chen, P. S. L., Cahoon, S., Pateman, H., et al. (2018). Employability skills of maritime business graduates: Industry perspectives. WMU Journal of Maritime Affairs, 17, 267–292. https://doi.org/10.1007/s13437-018-0140-9

Chen, Z., Alcorn, B., Christensen, G., et al. (2015). Who’s Benefiting from MOOCs, and Why. Available online: https://hbr.org/2015/09/whos-benefiting-from-moocs-and-why (accessed on 15 January 2023).

Clarke, M. (2018). Rethinking graduate employability: The role of capital, individual attributes and context. Higher Education 43(9), 1–15. http://dx.doi.org/10.1080/03075079.2017.1294152

De Cuyper, N., & De Witte, H. (2011). The management paradox: Employability and organisational commitment and performance. Personnel Review, 40(1-2), 152–172. https://psycnet.apa.org/doi/10.1108/00483481111106057

Deloitte. (2015). Industry 4.0 challenges and solutions for the digital transformation and use of exponential technologies. Available online: https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/manufacturing/ch-en-manufacturing-industry-4-0-24102014.pdf (accessed on 6 March 2024).

Economic Planning Unit. (2021). Malaysia Digital Economy Blueprint. Available online: https://www.ekonomi.gov.my/sites/default/files/2021-02/malaysia-digital-economy-blueprint.pdf (accessed on 6 March 2024).

Ellahi, R. M., Ali Khan, M. U., & Shah, A. (2019). Redesigning curriculum in line with Industry 4.0. Procedia Computer Science, 151, 699–708. https://doi.org/10.1016/j.procs.2019.04.093

Gałan, B. (2022). The role of digital competencies in the glottodidactic process from the perspective of the representatives of the digital native community. e-mentor, 93(1), 64–76. http://dx.doi.org/10.15219/em93.1555

Gallagher, S. (2018). Educational credentials come of age: A survey on the use and value of educational credentials in hiring, Northeastern University, Boston, Available online: https://cps.northeastern.edu/wpcontent/uploads/2021/03/Educational_Credentials_Come_of_Age_2018.pdf (accessed on 6 April 2024).

Gauthier, T. (2020). The value of micro-credentials: The employer’s perspective. Competency-based Education, e01209. https://doi.org/10.1002/cbe2.1209

Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203

Harvey, D., Wilde, R., & Roy, P. (2023). Employer and employee perceptions of micro-credentials. Northern Alberta Institute of Technology (NAIT).

Helsper, E. J., & Eynon, R. (2010). Digital natives: Where is the evidence? British Educational Research Journal, 36(3), 503–520.

Henseler, J. Ringle, C. M. & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modelling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://psycnet.apa.org/doi/10.1007/s11747-014-0403-

Hogarth, T., & Wilson, R. (2003). Skill shortages, vacancies, and local unemployment: A synthesis of the exploring local areas, skills and unemployment analysis. Available online: http://hdl.voced.edu.au/10707/155962 (accessed on 15 March 2024).

Hollands, F., & Kazi, A. (2019). MOOC-based alternative credentials: What’s the value for the Learner? Available online: https://er.educause.edu/articles/2019/6/mooc-basedalternative-credentials-whats-the-value-for-the-learner (accessed on 6 March 2024).

Institute of Student Employers (ISE). (2018). The global skills gap in the 21st century. Available online: http://info.qs.com/rs/335-VIN535/images/The%20Global%20Skills%20Gap%2021st%20Century.pdf (accessed on 12 March 2024).

International Labour Organisation (ILO). (2020). The socioeconomic impacts of COVID-19 in Malaysia: Policy review and guidance for protecting the most vulnerable and supporting enterprises. Available online: wcms_751600.pdf (ilo.org) (accessed on 6 March 2024).

Jewell, P., Reading, J., Clarke, M., & Kippist, L. (2020). Information skills for business acumen and employability: A competitive advantage for graduates in Western Sydney. Journal of Education for Business, 95(2), 88–105. https://doi.org/10.1080/08832323.2019.1610346

Joseph, V., & Khan, N. (2020). Digital literacy tools to enhance English reading and writing skills: A detailed literature. Global Language Review, 3, 21–33. http://dx.doi.org/10.31703/glr.2020(V-III).03

Karacay, G. (2017). Talent Development for Industry 4.0. Springer.

Kennedy, G. E., Judd, T. S., Churchward, A., et al. (2008). First-year students’ experiences with technology: Are they really digital natives? Australasian Journal of Educational Technology, 24(1), 108–122. https://doi.org/10.14742/ajet.1233

Khan, N., Khan, S., Tan, B.C., & Loon, C.H. (2021). Driving digital competency model towards IR 4.0 in Malaysia. Journal of Physics: Conference Series, 1793. http://doi.org/10.1088/1742-6596/1793/1/012049

Kimball, D. (2021). How digital transformation impacts the future of career transitions. Available online: https://www.forbes.com/sites/forbeshumanresourcescouncil/2021/04/29/how-digital-transformation-impacts-the-future-of-career-transitions/?sh = 34e17b1f3f71 (accessed on 20 March 2024).

Malaysian Qualification Agency (MQA). (2019). Guideline on micro-credential. Available online: https://www2.mqa.gov.my/QAD/garispanduan/Guideline on Micro-credential 10 Mei.pdf (accessed on 20 March 2024).

Mercer. (2019). Global Talent Trends 2019. Available online: mmc.com/content/dam/mmc-web/insights/publications/2019/feb/gl-2019-global-talent-trends-study.pdf (accessed on 20 March 2024).

Nair, S., Kaushik, A., & Dhoot, H. (2019). Conceptual framework of a skill-based interactive employee engaging system: In the context of upskilling the present I.T. organisation. Applied Computing and Informatics, 19(1/2), 82–107. https://doi.org/10.1016/j.aci.2019.05.001

OECD. (2023). Micro-credentials for lifelong learning and employability: Uses and possibilities. OECD Education Policy Perspective, 66, 1–44.

Oliver, B. (2019). Making micro-credentials work for learners, employers and providers. Deakin University.

Pollard, V., & Vincent, A. (2022). Micro-credentials: A post-digital counternarrative. Postdigital Science and Education, 4, 843–859. https://doi.org/10.1007/s42438-022-00311-6

Rahmat, A. M., Mohd Adnan, A. H., & Mohtar, N. M. (2021). Hybrid capabilities and Industry 4.0 job demands in recruiting Malaysian graduates. The International Journal of Academic Research in Business and Social Sciences, 11(1), 789–799. http://doi.org/10.6007/IJARBSS/v11-i1/9000

Rahmat, A. M., Mohd, I. H., Omar, M. K., et al. (2022). Integrating socio-digital skills in the industry 4.0 era for graduates’ employability: An employers’ perspective. Journal of Positive School Psychology, 6(3), 8493–8507.

Rathelot, R., & Van Rens, T. (2017). Rethinking the skills gap: A better understanding of skills mismatch is essential to finding effective policy options. IZA World of Labour, 391, 1–11.

Saunders, L. (2018). Information literacy in practice: Content and delivery of library instruction tutorials. The Journal of Academic Librarianship, 44(2), 269–278. https://doi.org/10.1016/j.acalib.2017.12.022

Silva, V. L., Kovaleski, J. L., & Pagani, R. N. (2019). Technology transfer and human capital in the Industrial 4.0 scenario: A theoretical study. Future Studies Research Journal: Trends and Strategies, 11(1), 102–122. https://doi.org/10.24023/futurejournal/ 2175-5825/2019.v11i1.369

Suarta, I. M., & Suwintana, I. K. (2021). The new framework of employability skills for digital business. Journal of Physics: Conference Series, 1833. http://doi.org/10.1088/1742-6596/1833/1/012034

Suleman, F. & Laranjeiro, A. M. C. (2018). The employability skills of graduates and employers’ options in Portugal. Education + Training, 60(9), 1097–1111. https://doi.org/10.1108/et10-2017-0158

Tee, P. K., Cham, T. H., Aw, E. C. X., et al. (2024a). Marketing micro-credentials: Understanding learners’ engagement and willingness to pay more. International Journal of Educational Management, 38(4), 1001–1020. https://doi.org/10.1108/IJEM-03-2023-0096

Tee, P. K., Cham, T. H., Low, M. P., & Lau, T. C. (2022). The role of perceived employability in the relationship between protean career attitude and career success, Australian Journal of Career Development, 32(1), 66–76. https://doi.org/10.1177/10384162211021940.

Tee, P. K., Cham, T. H., Low, M. P., & Lau, T.C. (2021). The role of organisational career management: Comparing the academic staff’s perception of internal and external employability in determining academic success. Malaysian Online Journal of Educational Management, 9(3), 41–58.

Tee, P. K., Eaw, H. C, Oh, S. P., & Han, K. S. (2019). The employability of Chinese graduates in Malaysia upon returning to China employment market. International Journal of Recent Technology & Engineering, 8(2S), 358–365

Tee, P. K., Wong, L. C., Dada, M., et al. (2024b). Demand for digital skills, skill gaps and graduate employability: Evidence from employers in Malaysia. F1000 Research, 13, 389. https://doi.org/10.12688/f1000research.148514.1

Tee, P. K., & Chan, Y. F. (2016). Exploring factors towards career success in Malaysia. International Business Management, 10(17), 3936–3943

Tomczyk, L. (2019). Skills in the area of digital safety as a key component of digital literacy among teachers. Education and Information Technologies. https://doi.org/10.1007/s10639-019-09980-6

Tomlinson, M. (2017). Forms of graduate capital and their relationship to graduate employability. Education + Training, 59(4), 338–352. https://doi.org/10.1108/ET-05-2016-0090

Truong, T. T. H., Laura, R. S., & Shaw, K. (2018). The importance of developing soft skill sets for the employability of business graduates in Vietnam: A field study on selected business employers. Journal of Education and Culture Studies, 2(1), 32–45. http://dx.doi.org/10.22158/jecs.v2n1p32

University Professional and Continuing Education Association. (2023). Employers value micro-credentials but don’t know how to assess their quality (Higher Ed Dive). Available online: https://upcea.edu/dive-brief-employers-value-microcredentials-but-dont-know-how-to-assess-their-quality-higher-ed-dive/ (accessed on 20 March 2024).

Unni, J. (2016). Skill gaps and employability: Higher education in India. Journal of Development Policy and Practice, 1(1), 18–34. https://doi.org/10.1177/2455133315612310

Van Laar, E., Van Deursen, A. J., Van Dijk, J. A., & de Haan, J. (2020). Determinants of 21st-century skills and 21st-century digital skills for workers: A systematic literature review. Sage Open, 10(1). https://doi.org/10.1177/2158244019900176

Verma, P., Nankervis, A., Priyono, S., et al. (2018). Graduate work-readiness challenges in the Asia-Pacific region and the role of HRM. Equality, Diversity and Inclusion, 37(2), 121–137. https://doi.org/10.1108/EDI-01-2017-0015

Vuorikari, R., Punie, Y., Carretero Gomez S., & Van den Brande, G. (2016). DigComp 2.0: The digital competence framework for citizens. Luxembourg Publication Office of the European Union. EUR 27948 EN. http://doi.org/10.2791/11517

Wheelahan, L., & Moodie, G. (2021). Analysing micro-credentials in higher education: A Bernsteinian analysis. Journal of Curriculum Studies, 53(2), 212–228. https://doi.org/10.1080/00220272.2021.1887358

World Economic Forum (WEF). (2020). The future of jobs report 2020. Available online: www3.weforum.org/docs/WEF_Future_of_Jobs_2020.pdf (accessed on 20 January 2024).