Digital audio hdmi

No, that is an output only method. Your issue is one of input. You want to make sure your microphone is plugged into the correct port on the computer (usually it's pink), and that the microphone isn't muted.

Go to Control Panel\Hardware and Sound and select sound then recording. One of those should light up once you speak into it, right click and set that as your default microphone. Make sure your microphone is plugged into the correct audio jack; if your microphone is USB plug it in any USB port.

Alternatively you can just select the default device in Skype options.