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Purpose The purpose of this paper is to examine the relationship between digital skills and employment and in this way accentuate importance of policy interventions for improving digital literacy. Design/methodology/approach Using Eurostat data, this paper demonstrates statistically significant correlation between digital skills and employment rates in EU. Findings This implies why it is so important for governments and employers to seek, propose and implement new strategies to promote digital inclusion, literacy and the training not only for new ICT professionals but also for the whole workforce. Social implications Digital skills, particularly digital literacy, are an important factor for socio-economic development of the society and employability of the labour force. Without adequate digital literacy, it is not possible to participate in the economy and the digital society, particularly having in mind the digital transformation that the world of work is experiencing in the content and the organisation. Beyond the work environment, it also affects the way people live and communicate. Originality/value In this paper, the importance and definition of digital literacy are elaborated, explaining the measurement of digital literacy and skills, as well as the relation between digital literacy and employability.