Succession Planning in Canada: 7 Steps to Get Started

“Don’t overcomplicate it. Set up the top three roles and work your way down.”

That’s the advice Peter Demangos, CEO and co-founder of SuccessionHR, shared during an Altis webinar last year. It’s a useful reminder for any employer wondering where to begin with succession planning.

Every organization has a handful of people whose absence would be felt the very next morning. They know which client calls need a personal touch, how a process really works beyond the documented version and why a decision was made five years ago.

Now imagine one of them retires next month. Would your team be ready?

It’s a question more Canadian employers are having to answer as experienced workers approach retirement. It also comes up regularly in our conversations with clients. They want to know who could step into their most critical roles, how long it would take someone new to get up to speed and what happens to the knowledge that leaves with a long-time employee on their last day.

The good news is that you don’t need a complicated plan to get started. With a clear understanding of your most important roles and some thoughtful preparation, succession planning can become a manageable part of your workforce strategy.

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How do you create a succession plan?

To create a succession plan, start by identifying the roles your organization can’t afford to leave vacant. Then look at the skills and knowledge each role requires, who could potentially step in and what development or support they’d need to be ready.

Here’s a summary of the seven practical steps to get started:

1. Identify your most critical roles. Start with the three positions that would be hardest to replace.

2. Assess successor readiness. Identify employees who could step in now, in one to two years or further down the road.

3. Look beyond the obvious candidates. Consider potential successors across teams and departments.

4. Develop your future leaders. Build their skills through mentorship, stretch assignments and hands-on experience.

5. Prepare for unexpected departures. Have a backup plan for important roles.

6. Capture institutional knowledge. Document critical processes and encourage knowledge sharing before employees leave.

7. Review your plan regularly. Revisit your succession plan as employees develop and business needs change.

With more experienced Canadians approaching retirement, taking these steps now can help your organization prepare for future vacancies while creating opportunities for employees to grow.

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Canada’s retirement wave is already here

Canada’s workforce is changing, and the numbers tell an important story.

According to Statistics Canada, annual retirements among Canadians aged 55 to 80 increased by roughly 50%, from an average of 183,900 in 2012 to 276,800 as of August 2025. That’s more than 750 people retiring every day.

There also aren’t as many younger workers coming up behind them. The 2021 Census found 81 people aged 15 to 24 for every 100 people aged 55 to 64, compared with 200 in 1966. By 2024, 19% of Canadians were between 50 and 64, with another 19% aged 65 or older.

For employers, this means competition for experienced talent could become even more challenging, particularly in specialized and leadership roles.

There’s another factor to consider: retirement isn’t happening on a predictable schedule.

Some Canadians are working longer because they want to. Others are staying because they need to. The average retirement age reached a record 65.4 years in 2025, while labour force participation among Canadians aged 65 and older climbed to 15.2%, its highest level since Statistics Canada began tracking it in 1976.

Financial concerns are part of the picture. BMO’s 2026 retirement survey found that Canadians believe they’ll need an average of $1.7 million to retire comfortably, yet 36% don’t expect to reach that amount. A 2025 Healthcare of Ontario Pension Plan survey also found that 66% of Canadians who haven’t retired expect to continue working during retirement to support themselves.

What does this mean for your workforce? Some employees may stay longer than expected, perhaps moving into part-time or contract arrangements. Others may leave earlier than planned. Health or disability accounted for approximately 22% of retirements in 2025.

Business owners are facing similar challenges. MNP’s 2025 Succession Readiness Report found that 64.1% of Canadian entrepreneurs don’t have a formal succession plan, even though people nearing retirement own 62% of the country’s small and medium-sized businesses.

The takeaway is simple: you can’t always predict when someone will retire, but you can prepare your organization for what happens next.

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Succession planning has changed

Succession planning used to be fairly straightforward. A senior leader would identify someone they believed could eventually replace them, often a person with a similar background or career path.

Today, that approach isn’t enough. People change jobs more frequently. Skills evolve. Technology changes how work gets done. The person who looks like the obvious successor today may not be the best fit for the role several years from now.

Modern succession planning is the ongoing work of preparing your organization for change, whether that’s a planned retirement, an unexpected departure or a role that will look very different in the future.

It means understanding which positions are most important to your business, identifying people with the potential to step into them and giving those employees meaningful opportunities to build the skills they’ll need.

At Altis, we’ve started thinking about this as progression planning. Succession planning shouldn’t only be about who’s leaving. It should also be about who’s growing.

When employees understand where their careers could go and what they need to get there, development becomes more meaningful. When leaders actively prepare their teams, the organization is better positioned for whatever comes next.

Succession planning can’t sit with HR alone. It works best when leaders across the organization take responsibility for developing talent, sharing knowledge and preparing their teams for change.

Before you start identifying successors, though, there’s an important step that often gets overlooked.

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Start with role analysis

How can you prepare someone for a future role if you aren’t entirely sure what that role requires?

Role analysis is a structured review of a position’s responsibilities, required skills and connection to your organization’s goals. It’s particularly valuable when planning for retirement because the work someone does today may look quite different from what’s written in their job description.

You might discover that a senior leader spends a surprising amount of time on administrative work. You may find that one long-time employee is the only person who knows how a critical process works. You might also see that some future leaders are already mentoring colleagues or taking on responsibilities beyond their current roles.

A good role analysis helps you:

• Identify important knowledge or responsibilities that depend on one person
• Understand how a role may change over the next three to five years, particularly with AI and automation
• Recognize employees who are already demonstrating leadership potential
• Update job descriptions to reflect what your organization needs today and in the future

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Our tip: Keep role analysis conversations focused on the position, not the person. Employees should feel comfortable sharing what they know, not worry that they’re being evaluated or replaced.

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A few questions worth asking:

• If you were away for a month, what would be difficult for someone else to manage?
• Are there responsibilities or processes that only you know how to handle?
• What knowledge or relationships would be difficult to replace if you left tomorrow?
• Who could potentially take on your role in the future? What experience or support would they need?

You may be surprised by what you learn. We recommend reviewing your most critical roles every 12 to 18 months, or sooner if you know a retirement is approaching.

For a closer look at the process, our guide, Unlocking Untapped Potential with Role Analysis, includes a practical role audit template to help you get started.

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7 practical steps to build your succession plan

Once you understand your critical roles, you can begin putting a plan in place. Remember Peter’s advice from the beginning: start with three.

1. Identify your three most critical roles

You don’t need to create a succession plan for every position overnight. Start with the roles your organization can least afford to leave vacant.

For many organizations, that might include the CEO, CFO and another position that is essential to keeping the business running. Over time, you can expand the plan to cover approximately 10% of positions, often including senior leadership and highly specialized technical roles.

Not sure which roles should come first? Ask yourself:

• Which vacancy would have the biggest impact on our operations?
• Where would it be most difficult or costly to find a replacement?
• Which employees may retire or leave in the next few years?

The answers will help you focus your efforts where they’ll make the biggest difference.

2. Build depth across three readiness horizons

One of the most common succession planning challenges is focusing only on people who could step into a role immediately. A stronger approach is to consider readiness over time.

For each critical role, identify potential successors across three groups:

• Ready now: Employees who could step into the role with minimal additional development
• Ready in one to two years: Employees with strong potential who need more experience or training
• Ready in three or more years: Employees who are earlier in their development but could grow into the role over time

This gives you more flexibility and helps you build a steady talent pipeline. It also reduces the risk of preparing several employees for the same opportunity at the same time, only to have no position available when they’re ready.

3. Look beyond the most obvious candidates

Your strongest future leader may not be the person who has been on the team the longest or currently reports to the person leaving.

That’s why it’s important to assess performance, potential and skills together. A performance and potential grid, often called a nine-box grid, can be a helpful starting point when it’s paired with a skills assessment based on what the future role actually requires.

Look across departments and locations. Someone elsewhere in the organization may already have valuable experience or leadership skills that could transfer well. A broader view can also support a more diverse leadership pipeline and help you avoid relying on the same few employees for several future vacancies.

4. Develop people for where the role is heading

Identifying potential successors is one thing. Helping them become ready is another.

Performance management helps someone succeed in the role they have today. Succession development prepares them for a role they may hold in the future.

That could mean leading a project, shadowing a senior colleague or taking on an acting assignment. You don’t need an elaborate development program. Three to five focused activities per employee can be a practical place to start.

Consider opportunities such as:

• Leading a stretch project
• Job shadowing or a temporary assignment
• Mentorship with someone who has a specific skill to share
• A relevant course or professional certification

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Our tip: Choose mentors based on the skill an employee needs to build. Their direct manager may be the right person for some areas, while a colleague in another department may have more relevant experience in others.

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Be transparent about why you’re investing in an employee’s growth. People are more likely to stay engaged when they understand what they’re working toward, even if a future promotion isn’t guaranteed.

5. Plan for unexpected departures

Not every vacancy comes with six months’ notice. An employee may resign unexpectedly, take a medical leave or decide to retire sooner than anticipated.

Think about who could temporarily take on important responsibilities while you determine the best long-term solution. That might be an experienced employee who has held the role before, someone who can step in on an interim basis or a contract professional with the right expertise.

In some cases, you may need to divide responsibilities among several team members until a permanent replacement is ready. The goal isn’t to predict every possible scenario. It’s to make sure your organization has options when plans change.

6. Capture knowledge before it walks out the door

Think about everything a long-time employee knows that isn’t written down: client preferences, important contacts, workarounds that keep processes running and the reasoning behind decisions made years ago.

That kind of knowledge can take years to build and isn’t always easy to replace. The earlier you start capturing it, the easier the transition will be.

Encourage employees in critical roles to document important processes and share their knowledge through mentoring or cross-training. You can also explore phased retirement or part-time arrangements that allow experienced employees to transfer responsibilities more gradually.

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Our tip: Ask employees in critical roles to keep a simple running document of the things they handle that others may not know about. It could include key contacts, recurring deadlines, unusual processes or lessons learned along the way. Even a few notes added regularly can save a successor months of guesswork.

7. Review your plan regularly

A succession plan shouldn’t be a document that gets created once and forgotten. People develop new skills. Employees leave. Business priorities shift. As AI continues to change how work gets done, some roles may evolve faster than expected.

A quarterly review is a useful starting point. Consider tracking:

• How many critical roles have at least one successor who is ready now
• Whether your most important positions have more than one potential successor
• Whether employees are progressing on their development plans
• Upcoming retirements or retention concerns that need attention
• Whether the same employees have been identified as potential successors for several roles

It’s also worth telling your broader team that succession planning is part of your commitment to employee development. You don’t need to share confidential details about individual successors. Employees should, however, understand that you’re investing in growth and creating opportunities for people to move forward.

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Don’t forget about early-career talent

When you’re focused on replacing experienced employees, it’s easy to concentrate on people who are already close to being ready for leadership roles. But some of the people who could lead your organization in 10 or 15 years are only beginning their careers today.

Right now, early-career workers are facing a challenging job market. Canada’s youth unemployment rate was 13% in September 2026. Research from the Centre for the Study of Living Standards also found that the increase in unemployment among Canadians aged 20 to 24 since 2023 has been driven by greater difficulty finding work.

Meanwhile, Statistics Canada found that between late 2022 and late 2025, growth in coding jobs was concentrated among workers aged 30 to 49, while the number of coding professionals under 30 remained relatively flat.

AI is adding another layer to the challenge. As technology takes on more routine tasks, some employers are reconsidering the entry-level positions that traditionally helped new graduates gain experience.

If we stop hiring and developing early-career talent today, who will be ready to take on mid-level and leadership roles tomorrow?

AI may change what junior employees do, but it doesn’t eliminate the need to help people learn how a business works, develop judgement or build relationships. When routine work can be automated, there may be an opportunity to give early-career employees more meaningful responsibilities sooner.

A few ways to keep developing your future talent pipeline:

• Continue making room for entry-level hires, co-op students and interns, even when budgets are tight
• Review junior roles to identify opportunities to build skills that complement AI
• Pair early-career employees with experienced colleagues to support knowledge sharing
• Offer stretch assignments and regular career development conversations
• Include early-career talent in longer-term succession planning

You don’t need to know exactly who your future leaders will be. You do need to give people the opportunity to become them.

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The best time to start is before you need a plan

While you can’t predict every departure or know exactly how your workforce will change, you can take practical steps now to make those transitions easier.

Start by identifying your three most critical roles. Take the time to understand what each position really requires. Look at the talent you already have and where people may need support to grow. Then keep building from there.

Your plan doesn’t have to be perfect. It needs to be current, practical and flexible enough to change as your organization does.

For more than 37 years, Altis has helped Canadian employers navigate workforce change. Whether you’re reviewing critical roles, looking for interim support or planning a permanent leadership hire, we understand how important it is to have the right people in place.

Not sure where to begin with succession planning? Start with your three most critical roles. Our team can help you map what each role requires and consider the talent and support you may need next.

Altis is a Canadian-owned staffing firm supporting organizations across the private and public sectors. We focus on relationship-driven recruitment, clear process and consistent delivery, helping employers hire with confidence and professionals build meaningful careers.