Summary: In professional services, people are the product. Turnover is not just an HR inconvenience, but also a margin and valuation problem. Replacing a mid-level accountant can cost tens of thousands of dollars in direct costs alone, with total costs rising to 90% to 200% of annual salary once lost productivity, slower ramp-up, and client disruption are included.
Why Talent is a Financial Problem, Not Just an HR One
In professional services, your people do not merely support what you sell. Their expertise is the product, driving billable work, revenue, and trusted client relationships. Losing good employees can come at a steep cost.
The average cost of employee turnover reached $30,680, as reported in an Express Employment Professionals-Harris Poll survey of Canadian hiring decision-makers, up from $29,234 a year earlier. Nearly one in three Canadian hiring managers (28%) also expect turnover to increase in 2026.1
Workforce engagement data reinforces the urgency. Gallup’s State of the Global Workplace: Canada Country-Level Data found that only 21% of Canadian employees were engaged, meaning nearly four in five were either not engaged or actively disengaged.2
That disengagement is showing up in career plans. A Robert Half survey of more than 1,500 Canadian professionals found that 44% intended to look for a new job in the second half of 2026.3
More than a Human Resources (HR) issue, retention must be treated as a business and financial strategy. At Aprio, we help professional services firms align workforce decisions with their broader financial goals through people and talent advisory, tax planning, and succession strategies.4
An Imbalance in a Tightening Talent Pipeline
Keeping the people who already know your business is equally important as finding the next great hire. Current trends in finance and accounting offer a clear reason why.
According to Robert Half Canada’s 2026 Canada Accounting and Finance Hiring and Employment Trends report, 58% of finance and accounting leaders plan to increase permanent headcount in the second half of 2026. Yet 53% say finding skilled professionals is more challenging than it was a year ago.5
Hiring difficulty has been a persistent structural challenge, as 68% of finance and accounting managers struggled to fill vacant positions in 2025. At that level, the talent gap is no longer simply a hiring problem, according to Robert Half Canada. It is a business risk that can limit capacity, disrupt continuity, and slow growth. 5.1
Such an imbalance changes the value of keeping long-term, experienced employees. Canadian firms need to structure compensation, advancement, and ownership so experienced professionals have clear financial reasons to stay, grow, and transfer their knowledge to sustain capability, continuity, and client confidence.
For Canadian accounting firms, the challenge extends beyond today’s vacancies. The profession must also prepare for a wave of future retirements ahead. Pivot, published by Chartered Professional Accountants of Canada (CPA Canada), reported that the average age of accountants in Canada is 47. Firms that do not build succession into their retention plan face a structural knowledge gap in the years to come.6
Although retirement may still be years away for many employees, firms need a two-track approach: strengthen staffing now and build succession for the future. Transferring technical knowledge, client relationships, and leadership responsibilities cannot be left until the last minute.
The Real Cost of Turnover
The cost of replacing an employee varies by salary, experience, responsibilities, and location. ADP Canada cites research estimating direct replacement costs at 50% to 60% of annual salary. Once lost productivity, overtime, vacancy coverage, slower ramp-up, lost knowledge, and client disruption are included, the total cost can rise to 90% to 200% of annual salary.7
Your employee retention rate can help you spot problems early:
Retention rate = Employees who stayed ÷ Employees at the start × 100 7.1
This calculation excludes employees hired during the measurement period because it tracks how many members of the original workforce remained. However, firms should measure new-hire turnover separately so that early departures are not overlooked.
While many firms set an internal retention target, trends and patterns matter more than a single snapshot. Tracking them alongside billable utilization, fee realization, and operating margin helps leadership see retention for what it is: an investment in capacity, client continuity, and long-term firm value.
Turnover Costs from Entry-Level Roles to Executives
To illustrate the potential financial impact of turnover for several job roles in professional services, the tables apply ADP Canada’s broad turnover-cost ranges to Robert Half’s “Mid” starting-salary guide for Toronto.
Toronto was selected from the guide’s Canadian location options for illustrative purposes only. Direct replacement costs were calculated at 50% to 60% of salary, while potential total turnover costs were estimated at 90% to 200%, based on the ranges cited by ADP Canada. The figures exclude bonuses, benefits, perks, and other compensation.8
Estimated turnover cost of replacing finance roles
| Role | 2026 starting salary range8 | Mid salary8 | Direct replacement cost7 | Potential total turnover cost7 |
|---|---|---|---|---|
| Junior accountant | $52,411–$63,102 | $58,147 | $29,074–$34,888 | $52,332–$116,294 |
| Accounting manager | $97,260–$137,676 | $113,687 | $56,844–$68,212 | $102,318–$227,374 |
| Chief financial officer | $188,001–$306,381 | $237,804 | $118,902–$142,682 | $214,024–$475,608 |
Estimated turnover cost of replacing technology professionals
| Role | 2026 starting salary range8 | Mid salary8 | Direct replacement cost7 | Potential total turnover cost7 |
|---|---|---|---|---|
| Information technology business systems analyst | $88,134–$137,676 | $115,512 | $57,756–$69,307 | $103,961–$231,024 |
| Technology project manager | $107,429–$161,404 | $140,544 | $70,272–$84,326 | $126,490–$281,088 |
| Chief information officer | $213,033–$309,510 | $261,011 | $130,506–$156,607 | $234,910–$522,022 |
Estimated turnover cost of replacing lawyers
| Role | 2026 starting salary range8 | Mid salary8 | Direct replacement cost7 | Potential total turnover cost7 |
|---|---|---|---|---|
| First-year lawyer | $84,483–$114,730 | $102,736 | $51,368–$61,642 | $92,462–$205,472 |
| Lawyer with 4–6 years’ experience | $126,985–$219,030 | $187,479 | $93,740–$112,487 | $168,731–$374,958 |
| Lawyer with 10+ years’ experience | $207,818–$291,258 | $240,151 | $120,076–$144,091 | $216,136–$480,302 |
Designing Tax-Efficient Total Rewards
Salary may catch an employee’s attention, but how you build the full offer shapes how valuable it feels. You need to balance what the package costs your company with what employees actually keep after tax. A well-designed total-rewards package usually brings together three areas:
1. Retirement Savings Plans
In a group Registered Retirement Savings Plan (RRSP), employees contribute through payroll, and your company may match part of those contributions up to a set limit. Investment income is generally sheltered from tax while it remains in the RRSP, while withdrawals are generally taxable.9
Meanwhile, a Registered Pension Plan (RPP) usually requires a greater commitment from the company, with formal funding, registration, and administration requirements. In a defined-benefit plan, the pension is based on a formula, which can make retirement income more predictable.10
2. Retention Bonuses
Retention bonuses can help keep key employees through a busy season, client transition, transaction, or other critical period. However, paying the full amount too early may simply postpone a resignation. Instead, link payments to clear service dates or milestones, consider paying the bonus in instalments, and explain when repayment may be required if an employee leaves early.
Aprio can help assess the cost, payroll and tax treatment, and how the bonus fits within your wider compensation, benefits, and workforce strategy. Our advisors can also support payroll administration, benefits planning, and employee retention programs. Canadian employment counsel should review the final agreement, particularly any repayment clauses, before implementation.11
3. Taxable and Non-Taxable Benefits
Before adding other perks, check how it will be taxed. The Canada Revenue Agency (CRA) generally treats employee benefits as taxable unless a specific exception or CRA policy applies.12
A benefit that leaves employees with an unexpected tax bill may not feel like much of a reward. A well-structured total-rewards package goes beyond a loose assortment of perks. When built around what employees value and clearly communicated, it helps you attract, retain, and support the people who drive your firm’s performance.
Profit-Sharing, Equity, and Employee Ownership
Beyond retirement and benefit plans, your company may share profits, offer direct equity to selected senior professionals, or transfer ownership of an incorporated business to employees as part of a succession plan. These arrangements generally fall into three practical categories:
1. Deferred Profit Sharing Plan
A Deferred Profit Sharing Plan (DPSP) lets you share business profits with all employees or a selected group without issuing company shares. Only the employer contributes. Employees generally pay tax when amounts are paid out, rather than while contributions and investment earnings remain in the plan.13 For eligible non-partner staff, it offers a practical way to benefit from the firm’s performance.
2. Shares and Stock Options
Shares give senior employees direct ownership, while stock options give them the right to buy shares under an option agreement. Canadian tax timing and available deductions vary, particularly where the employer is a Canadian-controlled private corporation (CCPC).14
At Aprio, we can help you compare equity-compensation structures, value shares or options, and assess the related tax and accounting effects. Our advisors can also help you understand how an arrangement may affect ownership and future transactions.
3. Employee Ownership Trusts
An Employee Ownership Trust (EOT) holds company shares for the benefit of employees and can help them acquire an incorporated business collectively. Canada’s EOT rules apply to qualifying transactions from January 1, 2024.15
Bill C-30, the Spring Economic Update 2026 Implementation Act, received royal assent on June 18, 2026, and made permanent an exemption for up to $10 million in capital gains arising from a qualifying business transfer to an EOT.16
The exemption applies to a qualifying transfer of shares in a CCPC. A partnership cannot use it directly. Partnership firms can instead consider profit-sharing, DPSPs for eligible non-partner employees, and a clear equity-partner or buy-in path.
DPSP vs. Group RRSP vs. EOT Explained
These three financial reward options can help support retention. However, they are not interchangeable, but Canadian companies can use more than one. A group RRSP can support retirement savings, a DPSP can reward business performance, and an EOT can provide a path to employee ownership. Here’s a breakdown of the three financial tools: 16.1, 16.2, 16.3, 16.4, 16.5, 16.6, 16.7
| Role | Deferred Profit Sharing Plan (DPSP) | Group Registered Retirement Savings Plan (RRSP) | Employee Ownership Trust (EOT) |
|---|---|---|---|
| Purpose | Employer-funded profit sharing. | Employee retirement savings through regular deductions from paycheque. | Employee ownership where a trust holds shares of a corporation. |
| Contributions | Employer contributions only. | Employee contributions, often with an employer contribution or match. | Trust acquires qualifying company shares. |
| Tax approach | Employer contributions and investment earnings are generally tax-deferred until paid out. | Tax-deferred growth, subject to the employee’s available RRSP contribution room. | Up to $10 million in capital gains may be tax-free for qualifying business transfers to employee ownership trusts. |
| Vesting | Up to a two-year vesting period may apply. | Immediate; funds belong to the employee once contributed. | No individual vesting schedule; eligibility depends on the trust deed. |
| What employees can take when they leave | Only vested employer contributions; non-vested amounts are forfeited. | All of it, and it can usually be transferred to a personal RRSP or another eligible registered plan. | No personal account or shares to transfer; former employees may keep payment rights if the trust allows. |
These tools can give key people more reasons to stay while helping you prepare future leaders or owners. At Aprio, we handle compensation, valuation, tax, and succession planning so the pieces work together. That can make the eventual ownership transition smoother for both your firm and your people.17
Workforce Cost Planning and the Attraction Pipeline
Once your compensation and retention tools are in place, the next question is whether you have the right people, at the right levels, and a reliable pipeline for future demand. A practical talent strategy for professional services firms should focus on three areas:
1. Plan the right workforce mix
Model your junior, senior, manager, and partner headcount against expected client work, revenue, and utilization. This can show whether you need another senior professional, more junior support, or better use of your current team. It also keeps compensation and retention spending deliberate rather than reactive.
2. Make career progression visible
Only 42% of Canadian leaders say their organizations offer mentorship programs, according to Robert Half Canada’s 2026 Canada Succession and Pipeline Planning report.18 Employees need more than a promise that advancement may come later. Show them what it takes to reach senior, specialist, leadership, or partner level, then support that path through mentorship, structured development, stretch assignments, and internal moves.
3. Maintain an active hiring pipeline
When qualified Canadians or permanent residents are unavailable, some firms may consider the Temporary Foreign Worker Program, which generally involves an employer-led application and, in most cases, a Labour Market Impact Assessment. For longer-term skilled recruitment, employers may also support a qualifying candidate’s permanent residence through an Express Entry-aligned job offer. Express Entry itself is an application-management system for skilled-worker immigration, and a job offer is not required under every program.19
Final Thoughts: Turn Retention into Strategy
Retention should be treated as a financial strategy, not simply an HR concern. Start by measuring where turnover is highest and what it costs your firm in lost productivity, client disruption, and replacement time.
Then review the basics. Are pay and benefits competitive? Can employees see a clear path to grow? Do bonuses, retirement plans, profit-sharing, or ownership opportunities reflect what your key people value?
You cannot prevent every departure. Some turnover is inevitable. The goal is to reduce avoidable losses, protect firm knowledge, and give your strongest employees clear reasons to stay, grow, and help lead the business forward.
Sources:
1. Express Employment Professionals, “Employee Turnover Is Getting More Expensive for Canadian Companies,” January 28, 2026.
2. Gallup, “Canada: State of the Global Workplace,” 2026.
3. Robert Half Canada, “Update on the 2026 Canada Job Market: June Labour Force Survey,” July 10, 2026.
4. Aprio, “Professional Services,” and “People & Talent Advisory Solutions,” accessed July 24, 2026.
5. Robert Half Canada, “2026 Salary Guide: Finance and Accounting Salary Trends in Canada,” accessed October 6, 2025.
5.1 Robert Half Canada, “The Accounting Talent Shortage: A Hidden Risk to Financial Integrity”, Oct 13, 2025
6. John Lorinc, “Supply and Demand,” Pivot, Chartered Professional Accountants of Canada, Fall 2024, 32–36.
7. ADP Canada, Getting Your Retention Strategy Right: Developing a Retention Strategy to Understand Why People Leave and Why People Stay, accessed July 24, 2026.
7.1. AIHR, https://www.aihr.com/blog/employee-retention-rate/, H1, 2025
8. Robert Half Canada, The 2026 Canada Salary Guide From Robert Half, Toronto salary calculator entries for the listed finance, technology, and legal roles, accessed July 24, 2026; Robert Half, “The 2026 Canada Salary Guide From Robert Half: How the Data Comes Together,” accessed July 24, 2026.
9. Canada Revenue Agency, “Contributions to Savings and Pension Plans,” and “Registered Retirement Savings Plan,” accessed July 24, 2026.
10. Financial Consumer Agency of Canada, “Employer Pension Plans,” October 14, 2025; Canada Revenue Agency, “About Registered Pension Plans,” accessed July 24, 2026.
11. Aprio, “People & Talent Advisory Solutions” and “HR and Payroll Services & Outsourcing,” accessed July 24, 2026; Stacy Thomas, “Stay-or-Pay Clauses in Canada? Experts Weigh In on the U.S. Trend of Charging Employees Who Quit,” HRD Canada, December 1, 2023.
12. Canada Revenue Agency, “Determine if a Benefit Is Taxable,” accessed July 24, 2026.
13. Canada Revenue Agency, “Register a Deferred Profit Sharing Plan: Overview,” and “Contributing to a Deferred Profit Sharing Plan,” accessed July 24, 2026.
14. Canada Revenue Agency, “Employee Security Stock Options,” accessed July 24, 2026; Aprio, “Valuation & Investigation Services,” accessed July 24, 2026.
15. Canada Revenue Agency, “Employee Ownership Trusts,” accessed July 24, 2026.
16. Department of Finance Canada, “Legislation Passes to Implement Measures from the Spring Economic Update 2026,” June 19, 2026; Parliament of Canada, “Bill C-30: Spring Economic Update 2026 Implementation Act,” royal assent June 18, 2026.
16.1 Canada Revenue Agency, Register a Deferred Profit Sharing Plan Overview
16.2 Canada Revenue Agency, Employer pension plans
16.3 Canada Revenue Agency, Employee Ownership Trust (EOT)
16.4 Canada Revenue Agency, Legislation passes to implement measures from the Spring Economic Update 2026
16.5 Canada Revenue Agency, Employer’s Guide Taxable Benefits and Allowances
16.6 Wealth Simple, DPSP vs GRRSP – how they compare, june 25, 2026
16.7 Canada Revenue Agency, Explanatory Notes to Legislative Proposals Relating to the Income Tax Act and Regulation
17. Aprio, “Business Succession Planning Services,” accessed July 24, 2026.
18. Robert Half Canada, “2026 Canada Succession and Pipeline Planning,” accessed July 24, 2026.
19. Employment and Social Development Canada, “Temporary Foreign Worker Program,” accessed July 24, 2026; Immigration, Refugees and Citizenship Canada, “Immigrate Through Express Entry,” accessed July 24, 2026.
