Rebuild & Resize - Ottawa Employment Hub

Rebuild and Resize

Do you know how to effectively deal with succession planning, downsizing and other departures?


Managing a big workforce is often a very difficult task. In order for your organization to thrive in the long-term and retain qualified individuals, a roadmap must be laid for what the organization will do in the future to maintain success. By setting in place a succession plan, an organization will better understand who will be best suited for key positions within the company. Through succession planning, the organization can identify and recruit talented individuals while at the same time developing their knowledge, skills and abilities through training and development. After establishing future goals, being prepared for the unknown such as dealing with downsizing, handling terminations, planning for retirement and addressing employee turnover are all key factors that need to be carefully examined.


Before you begin restructuring your organization, it is important to think over the following questions:

  • What kind of succession plan does your organization currently have?
  • What type of retirement plan do you offer your employees?
  • Has your organization experienced an increasing number of employee turnover?
  • Does your company have exit interviews that ask for employee feedback?
  • Does your firm have in place policies and procedures when handling terminations?
  • Does your organization have an action plan in dealing with downsizing and restructuring?

Develop a succession plan


Succession planning is a process where an organization ensures that employees are recruited and developed to replace each key role within the company. By generating a succession plan, you will be able to identify and recruit talented employees, and further develop their knowledge, skills, and abilities for future advancement and promotions to more challenging positions. Having a succession planning process is important for any organization because as a firm expands, loses key employees or has employee promotions within the company, succession planning ensures that you have sufficient employees to fill positions within all levels of the organization.


Succession planning is important so that you, as an employer, can:

  • Replace an organization’s human resources at a broad or specific level
  • Identify, assess and develop the employees’ knowledge, skills, and abilities to meet the current and future demands of the firm
  • Ensure a continuous supply of talent by helping employees develop their potential for key positions within the firm


Step #1 – Identifying key positions or key groups (current/future)

  • Decide on which position(s) if vacant would have a huge impact on the organization
  • Identify what jobs would be difficult to replace or require higher levels of expertise
  • Plan for anticipated future positions that do not currently exist

Step #2 – Identifying competencies

  • Review job descriptions and know what positions require particular knowledge, skills and competencies
  • Interview current and former job incumbents to gain insight on the competencies

Step #3 – Identifying and assessing potential candidates

  • Foster their learning and development to prepare them for future roles within the organization
  • Identify potential candidates: through candidate interviews, written exams, simulated work exercises, and performance reviews
  • Identify candidates through circulating an expression of interest, employee discussion on career plans and opportunities, develop an inventory of employee skills/competencies

Step #4 – Learning and development plans

  • Integrate learning and development opportunities by decreasing the gap between expected competencies and current KSAO’s
  • Consider learning and development opportunities through job assignments, job rotation and formal training
  • Transfer of knowledge through mentoring, coaching, job shadowing, and documentation of critical knowledge

Step #5 – Implementation and evaluation

  • Determine the strengths and weaknesses of the succession plan
  • Impact of the succession plan relative to company goals and objectives
  • Identify potential gaps in the planning and find ways to modify them


The Child Care Human Resources Sector Council’s (CCHRSC) HR Toolkit states that the following are benefits of good succession planning:

  • A means of ensuring the organization is prepared with a plan to support service continuity when the executive director, senior managers or key people leave
  • A continuing supply of qualified, motivated people (or a process to identify them), who are prepared to take over when current senior staff and other key employees leave the organization
  • An alignment between your organization’s vision and your human resources that demonstrates an understanding of the need to have appropriate staffing to achieve strategic plans
  • A commitment to developing career paths for employees which will facilitate your organization’s ability to recruit and retain top-performing employees and volunteers
  • An external reputation as an employer that invests in its people and provides opportunities and support for advancement
  • A message to your employees that they are valuable


Plan for retirement

While planning for retirement is an individual’s responsibility, many organizations provide retirement plans or other support to their employees as part of a benefits package. Many employees are choosing to work later in life.


Planning for retirement is important because employers are providing their employees with an income when they are retired and are not earning an income from working. The retirement plans can be set up in a variety of ways that will form a guaranteed payment. Retirement plans usually involve both the employer and employee to contribute money into an account while employed so that they will receive benefits upon retirement. The employers can help their employees plan for retirement by educating them on retirement plans workshops, and any retirement plans offered in the organization.


The Ontario Government announced the elimination of mandatory retirement at age 65, effective December 2006.The implication of the elimination of mandatory retirement is that some employees may wish to extend their employment beyond their 65th birthday. It is important that anyone wishing to stay beyond age 65 inform their department/organization well in advance in order to ensure that appropriate planning can occur.

Federally-regulated employers no longer have a mandatory retirement age; in 2011 sections of the Canadian Human Rights Act and Canada Labour Code that permit employers to force employees to retire once they reach a certain age, regardless of their ability to do the job, were repealed.

For most employers, it is going to be a challenge designing a compensation and benefit package with having four different generations working in the company. It is important to design a compensation and benefit structure that addresses the unique needs of each demographic group.

It is important that companies understand the details of their pension plan, whether it is a defined benefit or contribution or simply an RRSP program before considering design changes. Employers must be careful when providing employees with a pension plan so as to not only offer contributions to an RRSP. This often leads to employees not being able to retire.


Some common retirement plans are:

  • Pension Plans
  • Registered Retirement Savings Plans
  • Phased Retirements


Pension plans are classified as defined benefit or defined contribution according to how the payments are determined.

  • defined benefit plan guarantees a predictable monthly payment at retirement, calculated by using an established formula with some combination of the employee’s salary, years of service and/or age.
  • defined contribution plan will provide a payment/payout at retirement that will be determined by the amount of money contributed during the life of the plan and the performance of the stock or investments used.


Registered Retirement Savings Plan or RRSP is an account that provides tax benefits for saving for retirement. The RRSP is not based on the employer/employee relationship. RRSPs can provide ways to save money for retirement and defer and reduce taxes because:

  • Contributions to RRSPs, up to established limits, may be deducted from income in pre-taxed dollars.
  • Income earned within the account is not taxed until money is withdrawn from the plan.

RRSP accounts can be setup as either:

  • Individual RRSP– An Individual RRSP is associated with only a single individual; only they contribute money to their RRSP.
  • Spousal RRSP– The spouse of the contributor is actually the account holder. A spousal RRSP is a means of splitting income in retirement.
  • Group RRSP– An employer can arrange for employees to make contributions through a schedule of regular payroll deductions. In many organizations RRSP contributions can be based on a “matching” program. This means that the employer will put in a certain percentage or dollar amount based on the contributions the employee makes


Public pensions and benefits that individuals might be eligible for:

  • Canada Pension Plan (CPP) retirement pension
    A monthly benefit for contributors to the CPP who can take their full pension at age 65, an enhanced pension after age 65 or a permanently reduced pension as early as age 60.
  • Canada Pension Plan (CPP) Post-Retirement Benefit
    A monthly benefit that further increases the retirement income of CPP contributors who work while receiving a CPP retirement pension.
  • Old Age Security (OAS) pension
    A monthly benefit for people who have lived in Canada for more than 10 years after age 18 and are aged 65 and over.
  • Guaranteed Income Supplement (GIS)
    A non-taxable benefit for low-income Canadians aged 65 and over who receive the OAS pension.
  • Allowance
    A non-taxable benefit for low-income individuals aged 60 to 64. To qualify, you must be the spouse or common-law partner of an OAS pensioner who is entitled to receive the GIS benefit. See the changes to the OAS age of eligibility.
  • International benefits
    You may be eligible for benefits if you lived or worked in another country.
  • Ontario Guaranteed Annual Income System (GAINS)
    A monthly, non-taxable benefit to low-income Ontario seniors.


  • CCHRSC: Employee Benefits– Educates employers on the different types of benefits, including retirement benefits.
  • Finances: Old Age Security Pension– This website provides information of the Old Age Security Pension plan and what you need to qualify.
  • Public Pensions– Information on the Canada Pension Plan, Old Age Security pension and related benefits, the Canadian retirement income calculator and retirement planning.

Address employee turnover

Continued focus on employee turnover is of critical importance, because of the direct relation of turnover to improvements in labour costs and customer satisfaction.


Employee turnover is the normal process of replacing one worker with another for any reason. While there is some employee turnover that may be healthy for organizations, excessive employee turnover can be extremely costly and will negatively impact revenues and productivity.

Questions that are important to consider when it comes to employee turnover are:

  • Why have employees left the organization?
  • Which employees are most likely to leave and why?
  • How can your company become an employer of choice?


Companies often take a deep interest in their employee turnover rates because replacing workers can be a costly part of doing business. When a company must replace a worker, it incurs direct and indirect expenses. Moreover, constant and regular turnover not only reduces employee morale and productivity, it shows big problems ahead for the organization

The many costs associated with employee turnover can include reduced productivity, recruiting and hiring expenses, training programs for new employees, high risk liability, and high unemployment taxes. There are also intangible impacts on the organization such as the company’s reputation in their respective marketplace, customers who must await the newly replaced employee and work with someone new who may not be trained and proficient, and it also hinders the company’s ability to attract and hire high performing individuals.


Sigma Assessments Inc. has identified the following costs of turnover:

  • Recruitment of replacements, including administrative expenses, advertising, screening and interviewing, and services associated with selection, such as security checks, processing of references, and, possibly, psychological testing.
  • Administrative hiring costs.
  • Lost productivity associated with the interim period before a replacement can be placed on the job.
  • Lost productivity due to the time required for a new worker to get up to speed on the job.
  • Lost productivity associated with the time that coworkers must spend away from their work to help a new worker.
  • Costs of training, including supervisory and co-worker time spent in formal training, as well as the time that the worker in training must spend off the job.
  • Costs associated with the period prior to voluntary termination when workers tend to be less productive.
  • In some cases costs associated with the communication of proprietary trade secrets, procedures, and skills to competitive organizations.
  • Public relations costs associated with having a large number of voluntary or involuntary terminations in the community spreading gossip about the organization.
  • Increased unemployment insurance costs.


These causes of turnover have also been excerpted from Sigma Assessments Inc.:

  • The economy– In exit interviews one of the most common reasons given for leaving is the availability of higher paying jobs.
  • The performance of the organization– An organization perceived to be in economic difficulty will likely have more employees wanting to leave the organization due to potential layoffs.
  • The organizational culture– The reward system, the strength of leadership, the ability of the organizations to elicit a sense of commitment on the part of workers, and its development of a sense of shared goals, among other factors, will influence job satisfaction, job retention and turnover rate.
  • The characteristics of the job– Some jobs are intrinsically more attractive than others. A job’s attractiveness will be affected by many characteristics, including its repetitiveness, challenge, danger, perceived importance, and capacity to elicit a sense of accomplishment. A job’s status is also important, as are many other factors.
  • Unrealistic expectations– Another factor is the unrealistic expectations and general lack of knowledge that many job applicants have about the job at the time that they receive an offer. When these unrealistic expectations are not realized, the worker becomes disillusioned and decides to quit.
  • The person– There are also factors specific to the individual that can influence turnover rates. These include both personal and trait-based factors. Personal factors include things such as changes in family situation, a desire to learn a new skill or trade, or an unsolicited job offer.


In order to minimize turnover in the workplace here are some of the ways you can address the problem.  Many of these have been touched on throughout this portal.

  • Hire the right people: By hiring the right people from the beginning, you can reduce employee turnover.  Through interviews and examining the candidates carefully, you can determine if those being hired have the right skills and if they fit with the company culture.
  • Compensation and benefits: Strive to get current data on industry pay packages, along with benefits, flexible work schedules and bonus/merit structures. Reviewing compensation and benefit packages annually can help your firm identify trends in the workplace.
  • Be attentive to employee needs: Understanding the needs of employees and paying attention to their needs can be a deciding factor in reducing turnover. Offering telecommuting, compressed schedules or on-site or back-up day care can help alleviate the daily stresses of work/ life balance.
  • Drive employee engagement: Employees need socal interaction and meaningful work to gain a sense of accomplishment. They need respect and recognition for the work they do from managers/management and a challenging position with room for growth and career development.
  • Positive Work Environment: Awards, recognition and praise are cost-effective ways to maintain a happy, productive workforce. Simple e-mails of praise, monthly memos outlining achievement by team members, or peer-recognition programs are all ways to provide positive feedback.

Clear Career Paths: Employees want to know where they could be headed and how they are doing currently. Using annual reviews and mid-year performance evaluations can help guide employee concerns, questions and identify challenges that pose as a barrier to success.


Conduct exit interviews

Exit interviews are conducted with employees who are leaving your organization.  The primary purpose of an exit interview is to discover why the employee is leaving, gather and analyze the data, and put it to good use to increase the retention rates of the company.


Exit interviews are critical to the future growth of an organization and its people. When an employee leaves an organization, an exit interview can:

  • Identify in what areas the organization is doing well
  • Find out what the employee liked/disliked about their employment
  • Pinpoint areas of the firm that the employee feels need the most improvement
  • Confirm the skill sets, experience, and attributes needed for the job
  • Capture useful knowledge, contact, and tips from the exiting employee
  • Obtain feedback, identify causes, and understand why the employee is leaving the organization
  • Gather data for improving working conditions and determine a strategy to retain employees
  • Analyze the employee responses to see if there is a correlation with other available information such as employee surveys or peer and supervisor reviews.
  • Create satisfaction in departing employees that their opinions are being valued


There are numerous reasons why employees may put in their resignation, and many of the encountered reasons employees resign include:

  • Feeling of under appreciation and lack of recognition
  • Being unsatisfied with their treatment from supervisors
  • Personal conflicts ranging from stress to relationships with co-workers
  • Perception of opportunity and the lack of promotion
  • Compensation complaints


The US’s National Federation of Independent Businesses (NFIB) identifies the following steps for conducting an exit interview

  1. Focus on good employees who resign: interest should be on why valued employees quit.
  2. Have every interview conducted by someone other than the employee’s immediate supervisor (a human resources interviewer, if available). The supervisor’s relationship with the employee can influence an employee’s response and even their main reason for leaving an organization.
  3. Explain the purpose of the exit interview to the departing employee. The essential purpose is to determine whether there are problems that should be addressed to help prevent further losses of valued employees.
  4. Explain the confidential nature of the process. Assure the employee that no one beyond the interviewer will be able to attribute specific comments to the individual.
  5. Keep the process simple. An exit interview should be relatively brief and focused on specific areas.
  6. Make the interview one-on-one, conducted in private. “Ganging up” on a departing employee with multiple interviewers is intimidating and can limit the person’s willingness to respond honestly.
  7. Be sensitive to potential differences between persons leaving for other employment and those resigning for “personal reasons.” The straightest answers come from those who admit they’re going to work elsewhere; those who cite only “personal reasons” are often reluctant to reveal their true reasons for fear of repercussions (poor references, etc.).
  8. Encourage the departing employee to summarize his or her employment experience. This usually provides answers to some questions before they are asked.
  9. Assure the individual employee that all information provided will be used anonymously and that no permanent record will be retained.
  10. Assess and tabulate exit interview information. When patterns emerge from accumulated information, consider what can realistically be done to prevent future loss of good employees.


A few questions to consider for a more effective exit interview include:

  • Why are you leaving?
  • What factor(s) contributed to your decision to leave?
  • What did you like most/least about your job?
  • Under what conditions might have you stayed at your current job?
  • What could be done to make the company better?
  • What does your new employer offer that you don’t have here?


Handle terminations


Employee terminations can be difficult and often an emotional experience, especially for the employee being terminated. The employer must plan the employee termination process, be prepared for a potential employee emotional outburst, and ensure security throughout the termination process. The way in which an employer handles the termination process can impact both the reputation of the organization and the morale of remaining employees.  Possible legal implications add to the stress.

This section focuses on individual terminations; for information on group terminations, please go to Deal with Downsizing.


At times, dismissal may be the only option that an employer has left to deal with poor performance.  For dismissal to take place the organization must have grounds; dismissal action is not a personal decision. Just cause for dismissal includes any act by the employee that could seriously affect the operation, management, or reputation of the organization. This would include fraud, dishonesty, forgery, harassment, incompetence, insubordination, continuous absenteeism, or refusal to obey reasonable orders. An employee who is negligent or consistently makes errors on the job, and who has been warned, can be terminated for cause.  In these situations, there should be supporting documentation provided that describes both the manager’s and the organization’s attempts to assist the employee in correcting the problem.

This documentation must clearly show that:

  • The issues have been discussed with the employee
  • Efforts made to find ways to solve the problems were to no avail
  • The employee was made aware that failure to perform to pre-established standards would result in termination.


When terminating an employee for either poor performance, reduction in your labour force or other financial reasons, it is often seen as a difficult task because of the potential liability and risk this may cause to the organization. The method in which an organization handles terminations not only affects possible employment discrimination or employment-related lawsuits, it can also have an effect on employee morale and the organization’s reputation. It is recommended that you consult a lawyer for advice on the best way to proceed.

The CCHRSC’s HR Toolkit provides the following definitions of these key components.

  • Termination with cause, in law, means that an action or omission by the employee has irreparably damaged the employment relationship between the employer and the employee. Usually, termination with cause occurs when an employee is dismissed for a serious reason related to the employee’s conduct.
  • Termination without cause means that the employee is being terminated for reasons that are not related to misconduct. Notice of the termination is required as outlined in the employment/labour standards. Severance pay may also be required as outlined in the legislation.
  • Notice is the amount of time between informing an employee in writing that s/he will be terminated and the date upon which the termination will take effect (i.e. the last day that the employee will be paid).
  • Payment in lieu of notice means that an employer may choose to have the termination take effect immediately, and pay the employee for the weeks of notice required by the legislation or, if greater than that required by legislation, as agreed to in the employment contract. If you have determined that you are terminating an employee without cause, you will need to consider whether you want to provide notice or payment in lieu of notice depending on the likely impact of the employee continuing to work during the notice period.
  • Severance Pay – Some jurisdictions require that an employee who is terminated without cause be provided with severance pay.


The Ontario Ministry of Labour has developed tools to help employers figure out their obligations around terminations.

  • The Termination Tool is designed for employers trying to determine whether an employee is entitled to termination notice or pay. It includes a Termination Entitlement Tool and a Termination Pay Calculator.
  • The Severance Tool is designed for employers trying to determine whether an employee is entitled to severance pay; it includes the Severance Entitlement Tool and Severance Pay Calculator. 


The CCHRSC’s HR Toolkit outlines these key steps to reducing potential issues or legal action around terminations.  You will see that many of them are preventative and take place at the beginning of, or even before, the employment relationship.

  • Use a written contract of employment which states termination provisions
  • Have clear policies that employees have read, understand and agree to abide by
  • Consistently and fairly apply the policies
  • Implement an orientation process which clearly outlines your organization’s expectations for the behaviour and performance of your employees
  • Provide employees with ongoing feedback about their performance which is documented in the employees’ personnel files
  • Establish a fair discipline process, clearly explain the process to employees and consistently implement it
  • Consult with a lawyer prior to the termination
  • Treat the employee in a respectful, impersonal and unemotional way during the termination process.


You are required to issue a Record of Employment (ROE) when an employee is laid-off, terminated, or resigns. The ROE is the single most important document in establishing an Employment Insurance (EI) claim. ROE Web is a secure web-based application that enables you to create, submit, and print ROEs electronically. Find out more by clicking here.

You are responsible for completing ROEs for a small, medium or large business. Service Canada encourages you to submit your records of employment electronically.


Deal with downsizing


Knowing how to deal with downsizing is important for any organization because it is not just about the resultant empty desks, rather it is a radical change that also affects those who stay. The remaining staff will experience various emotions and employers need to make a concerted effort to keep morale up, and reduce issues with poor productivity and job dissatisfaction. Those who leave will often take to social media and other outlets to share their experiences (good and bad) and your company’s reputation can be quickly affected.  It is also important to explore all of your options to see if there are other cost-reduction methods that could be implemented instead.


When your organization is faced with tough times, there are many cost-reduction strategies that you can explore before turning to downsizing.  In his Ivey Business Journal article, HR Strategies that Can Take the Sting Out of Downsizing-Related Layoffs, Franco Gandolfi lays out these popular approaches that emerged from his research.

HR practices for short-range cost adjustments (a business slowdown of up to 6 months)

  • Hiring freeze
  • Mandatory vacation
  • Reduced workweek
  • Cut in overtime pay
  • Salary reduction
  • Temporary facility shutdown
  • Soliciting cost-reduction ideas from employees

HR practices for medium-range cost adjustments (a business slowdown of 6-12months)

  • Extended salary reductions
  • Voluntary sabbaticals
  • Employee lending
  • Exit incentives

HR practices for long-range cost adjustments (a downturn exceeding 12 months)

At this stage, layoffs may be unavoidable, but firms take measures to be able to re-attract and re-gain layoff victims in a post-downsizing phase by looking at:

  • Rehiring bonuses
  • Maintaining communication with laid-off employees
  • Internal job fairs 


The federal government’s Work-Sharing program can help your organization avoid permanent layoffs.  Service Canada describes the program an adjustment program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. It provides income support to employees eligible for Employment Insurance benefits who work a temporarily reduced work week. Employees must agree to a reduced schedule of work and to share the available work over a specified period of time. Implementing this program can help the company reduce salary costs without resorting to layoffs.


The following are tips for dealing with the uncertainties of downsizing:

  1. Increase communication: Open and honest communication with employees- by sharing what you know and what you do not know about how the economy is affecting the organization will help reduce employee uncertainty. Use regular staff meetings for employees to have an opportunity to ask questions and diffuse employee stress.
  1. Invest in training: Continue to plan for the future and show your employees that they are importantOpportunities such as e-learning, lunch and learn sessions, encourage employees to join trade associations, and mentoring programs.
  2. Involve your employees in decision-making: Employees may suggest alternatives to layoffs such as pay cut, closing at noon on Fridays, or other cost-saving measuresIncrease the amount of employee buy-in if they are involved in the decision-making process.
  3.  Stay positive: Maintaining a positive outlook by sharing good news widely.
  4. Try to keep the little things: When budgets get tight, the first impulse is to cut everything that seems non-essential. If you can, try to keep the small perks that don’t cost very much, you can really boost morale in the workplace.


The Alliance of Sector Councils also outlines four basic principles that are excerpted here:

1. Plan layoffs carefully. Take the time to ensure your layoff plan is in sync with your business plan. Look at your current projects—particularly those that are critical to the business. Make sure you have a clear idea of the projects that will be underway once the crisis is over.

2. Be prepared. Consider writing up and practicing a script and make a list of questions that might be asked with answers ready. Get to the point and remember that much of what is said in a layoff meeting will not be retained, so have resources available for affected employees, such as information on benefits, separation terms, and important contacts and other written information. Finally, make sure you have fully planned the necessary post-layoff logistics.

3. Know the law. Know your responsibilities as an employer. The law stipulates that employees must get either some notice prior to dismissal or be compensated instead. There are also certain rules that apply when laying off groups of individuals. Speak to a lawyer or contact your provincial labour board to make sure that you are meeting your obligations in accordance with the law.

4. Treat people with dignity and respect. Distancing yourself because you feel bad won’t make anyone feel better; remember that this is not your fault, and avoiding people will not minimize feelings of guilt or hurt, but will make them worse. Be kind and compassionate, and give people the respect they need.


The Canada Labour Code outlines the procedures to follow when a group termination involves 50 or more employees from a single industrial establishment who are dismissed simultaneously within a four-week period.  Because of the number of employees involved, it is unlikely to apply to small and medium sized enterprises; however, if you would like to find out more, see Mass Terminations at the Ontario Ministry of Labour website.


  • Service Canada: Work-Sharing Program – What work sharing is, eligibility criteria, how to apply.
  • Ivey Business Journal– HR Strategies that can take the sting out of downsizing-related layoffs that includes the framework of cost-reduction stages, short range and long-term cost adjustments.
  • Managing Employees in a Downsized Environment – This article examines the challenges faced by HR professionals after the organization has been downsized through layoffs.
  • Downsizing Best Practices– This PowerPoint slideshow talks to best practices in downsizing, prepared by Dr. Carol A. Beatty, available on SlideShare.
  • Mass Terminations– Information on group terminations that involve 50 or more employees, at the Ontario Ministry of Labour website.