Unfillable skills gaps are affecting the productivity and revenue of Australian companies more than in other countries, with many Australian managers telling a recent study that they have reached out to former employees to try to get them to come back.

Fully 79 per cent of respondents to Ceridian’s newly released 2022 Executive Survey – which included 307 managers at Australian businesses and 2,000 worldwide – said they were very or extremely involved in seeking out ‘boomerang’ talent, well above the 66 per cent saying the same globally.

A further one in five said they had done so occasionally, meaning that nearly every respondent had tried to boomerang employees to resolve labour shortages that, 44 per cent of ANZ respondents said, are the biggest barrier to managing disruption.

That was well ahead of the 37 per cent that said the same globally – confirming that Australian businesses are struggling more than most to adjust to the perfect storm of disruption caused by COVID-induced labour shortages, widespread hyperinflation, and the global economic chaos caused by Russia’s invasion of Ukraine.

Fully 15 per cent of employees have ‘boomeranged’ back to a former employer, one recent study found, with 40 per cent saying they would consider returning to a former role.

Despite being routinely labelled as being ready to quit on a moment’s notice, Millennials were most ready to give a previous employer another chance, with 46 per cent saying they would return to a former employer.

Boomerang workers – often over-50 IT workers who finish up long careers – are already common among retired mainframe specialists, whose skills are particularly difficult to replace.

“Many retire and start to tick off the list on the fridge from the wife, which says ‘I want you to do this and fix this and move this around the house’,” laughs SCP Australia managing director Paul Matthews, “and that’s all ticked off within three to six months.”

“Then they come back to me and ask if I have a little part-time contract for them. Those people are still around, they’re still working hard, and they’re still being paid reasonable salaries.”

Succession planning leaves Australian companies exposed

Despite managers’ desperation, the study found they are far worse than overseas peers at laying down formal succession plans to cushion the impact of staff attrition.

Just 65 per cent of ANZ organisations have formal succession planning arrangements for senior leadership roles, Ceridian found – well behind the 83 per cent of US companies and 87 per cent of Singapore businesses that do the same.

And a mere 60 per cent of local companies have plans to replace critical technical experts when they’re poached, quit, or retire – well behind the US (69 per cent) and Singapore (73 per cent) – and only half said they have plans to replace people leaders.

Inadequate succession planning risks leaving key company functions rudderless, hindering organisational efficiency as companies spend months searching for replacements – leaving leadership vacuums that can complicate succession planning and compromise business continuity.

Indeed, 83 per cent of ANZ businesses admit being very to extremely concerned that they won’t be able to fill a key leadership role when it becomes vacant.

Fully 65 per cent of ANZ organisations said leadership roles typically remain vacant for 4 months or more – much higher than the 43 per cent global average – and when they are ultimately filled, those roles go to external candidates 84 per cent of the time.

“Without comprehensive succession planning, organisations risk vacancies that are essential to their everyday operations and organisational knowledge,” the report’s authors warned.

Current staff aren’t being trained up

Poor succession planning was linked to a relatively low commitment to employee development, with ANZ organisations relying more heavily on outside contractors to make up skills shortfalls than their overseas peers.

Just half of local respondents said they create internal training programs to help staff upskill for new roles – well behind the US (62 per cent) and global average (54 per cent) – and only half regularly move skilled employees to higher-impact roles.

“Skills gaps are a threat to business continuity and our data shows that there should be more focus on building a culture of learning,” the report notes, with Australian companies the world’s most likely to subsidise external training rather than delivering their own.

Instead, 46 per cent of ANZ respondents generally hire contractors to fill skills gaps – a risky practice in a competitive market where in-demand contractors are commanding higher salaries and may leave for greener pastures on short notice.

Companies should reduce their dependence on external staff by increasing internal training and career development pathways, the report recommends, noting that “while hiring from outside can make strategic sense for some roles, organisations can benefit from increasing their investment internally to fill those roles faster and minimise disruption.”