The Succession Blind Spot: Why Your Next Head of Tax May Already Be Overdue
Something quiet is happening in corporate tax departments across North America.
It’s not a headline. It’s not a regulatory shift. It’s the steady, almost invisible departure of institutional knowledge. Walking out the door, one retirement at a time.
We talk about the tax talent shortage often. The shrinking pipeline of CPAs. The difficulty of hiring specialists. But there’s a deeper, more urgent problem hiding inside most tax functions: the absence of a real succession plan.
Not a spreadsheet with names. Not a vague assumption that someone will step up. A deliberate, strategic plan to develop the next generation of tax leadership. Before it’s too late.
The question isn’t whether your senior leaders will leave. It’s whether someone is ready when they do.
The Scale of the Gap
The numbers have been building for years. The AICPA reported that nearly 75% of the CPA workforce hit retirement eligibility back in 2020. Since then, accounting program enrollment has continued to decline. Fewer graduates are specializing in tax. And those who do enter the profession are often lured toward advisory, technology, or financial services, industries that move faster and, in many cases, pay more at the entry level.
What this means for the average tax department is stark: the senior leaders who’ve built these functions over decades are nearing the end of their careers, and there is no clear bench behind them.
A recent survey found that 62% of executives say their organization lacks a clear succession strategy. In tax departments, where the work is deeply specialized and the learning curve is long, that gap is especially dangerous.
When a Head of Tax retires without a successor, the damage isn’t just operational. It’s strategic. Relationships with external advisors, institutional memory of audit history, knowledge of cross-border structures. These things don’t transfer through a handover document.
Why Tax Departments Are Uniquely Vulnerable
Succession planning is difficult in any function. But tax has characteristics that amplify the risk.
- First, the expertise is deeply technical. A strong tax leader doesn’t just understand compliance; they understand how compliance intersects with corporate strategy, treasury, legal, and operations. That kind of fluency takes years, sometimes decades, to develop.
- Second, tax departments are often small. A function of five or six people doesn’t have layers of management to draw from. When the most senior person leaves, the next in line may be technically strong but untested in leadership, communication with the C-suite, or cross-functional strategy.
- Third, and perhaps most overlooked: many tax leaders see the gap clearly and try to prepare for it. They mentor. They advocate for headcount. They push for development budgets. But the talent pool is thin, retention is difficult, and the professionals they groom are often recruited away before a transition can take shape. The intent is there. The conditions rarely cooperate.
The result is a function that appears stable on the surface but is, in reality, one resignation away from a crisis.
Succession as Strategy, Not Paperwork
True succession planning in tax isn’t about listing potential replacements. It’s about building an environment where readiness is the default.
That starts with exposure. The next generation of tax leaders needs visibility: board-level conversations, audit committee dynamics, and the commercial decisions that shape the tax position. If your rising talent only sees the provision, they’re not being prepared to lead the function.
Succession planning isn’t a project. It’s a posture. It’s the difference between reacting to a departure and being ready for one.
It also means rethinking what “readiness” looks like. In an era of AI-enabled compliance and global regulatory complexity, tomorrow’s tax leader will need a different blend of skills than today’s. Strategic judgment. Technology fluency. The ability to translate technical positions into language the CFO and the board can act on.
Recent industry data reinforces this shift. Tax professionals currently spend more than half their time on routine activities, and leadership teams are actively working to rebalance that. Nearly 90% of tax and finance leaders report upskilling their existing workforce, and more than 80% are hiring for capabilities beyond traditional tax technical skills.
These are encouraging signals. But upskilling without succession intent is just training. The difference lies in connecting individual development to a specific leadership trajectory.
The Knowledge That Doesn’t Transfer
Perhaps the greatest risk in a poorly managed transition is the loss of what can’t be documented.
Every experienced tax leader carries a map of the company that no org chart captures. Which jurisdictions are sensitive. Which audit positions were hard-won. Where the risk sits in a restructuring. Why a particular transfer pricing model was chosen ten years ago.
When that knowledge walks out the door, it doesn’t come back. And the cost isn’t always obvious. It shows up as an unexpected assessment, a missed incentive, or a compliance failure that a more experienced leader would have seen coming.
Forward-thinking organizations are pairing senior leaders with high-potential successors years before the transition. Not as a mentorship gesture, but as a deliberate knowledge transfer strategy—with structured handoffs, shared client relationships, and joint participation in key decisions.
Looking Ahead
The tax departments that thrive over the next five years won’t just be the ones with the best technology or the deepest technical expertise. They’ll be the ones that treated leadership continuity as a strategic priority—not an HR afterthought.
Succession planning isn’t a project. It’s a posture. It’s the difference between reacting to a departure and being ready for one.
And in a profession where the talent pool is shrinking and the stakes are rising, readiness isn’t optional.
It’s the most important hire you’ll never have to make.
