After six months of testing and nearly $300 million in investment, the federal government is still years away from fully implementing a next-generation payroll and HR cloud platform to replace the troubled Phoenix Payroll System.
Moving more than 360,000 federal employees to a cloud-based system will require hiring more contractors and restarting union agreements to streamline pay categories. The government is also considering building a new data hub to clean and standardize employment information from departments before migrating it to the new Dayforce platform.
Alex Benay, deputy minister at Public Services Procurement Canada (PSPC), told CTV News that the government may need to spend hundreds of millions more to build the NextGen-PayHR platform before it becomes operational. admitted that.
PSPC has outlined its implementation strategy and said it will provide final cost estimates by 2026.
The Government of Canada’s efforts to improve accessibility in public services and the selection of third-place vendors may also be contributing to longer timelines and higher costs.
Alex Benay, Deputy Minister of Public Services and Procurement of Canada; Benay stands in front of a wall of inspiration with quotes written by the Payroll Transformation team.
Why did Canada choose to bid third?
Dayforce’s software must be redesigned and retooled to meet the complex requirements of the federal government.
The Toronto-based company, officially known as Ceridian, has 250 employees dedicated to the NextGen project. They work alongside a team of 126 federal civil servants. The number of people participating in the project is expected to increase over the next two and a half years.
CTV News has learned that Dayforce ranked last among three competing vendors when it won the NextGen-PayHR contract in 2021.
The top bidder was SAP, followed by Workday and Dayforce.
Benay said the contract was signed before he took over responsibility for NextGen PayHR, but said he understands the government chose Dayforce because it was “the most flexible.”
“After the RFP, we started pushing all three companies more, including accessibility laws and official language laws, and (Dayforce) was the most active participant,” Benay said in an interview with CTV National News. He spoke at
Just over 6 percent of federal employees have a disability, which is lower than the national average of 9.1 percent. The Government’s Accessibility Strategy aims to increase the number of disabled employees to 5,000 by 2025.
“Accessibility is a core principle of our country. It is based on our laws and our official languages as well. We take very seriously whether the suppliers that come to bid on Government of Canada projects can meet our nation’s core values. So for us, that’s not a negotiating point,” Benay said.
accessibility standards
SAP had previously won the NextGen pilot project in 2019, making it the favorite to win the bid.
SAP withdrew in the summer of 2021 after being selected for the massive project, according to four separate government and private sources. Officials said federal officials made additional accessibility and language requests that were not specified in the government’s original request for proposals (RFP).
SAP said in an email to CTV News that it has met all the requirements of the RFP and resulting contract, and that its software and web applications have been tested against the European Union EN301 549 standard and Web Content Accessibility Guidelines Level 2.2. I said that there is. These are the same requirements outlined in the government’s RFP.
The federal government then approached Workday for the contract and asked it to confirm its intention to fulfill the technical and financial bid “without changing the stated terms,” according to documents obtained by CTV News.
Workday responded by agreeing to honor the terms of the original RFP and requesting a meeting to discuss the new caveats. Federal negotiators responded that Canada was “not in a position to negotiate any terms.” Although no meeting was scheduled, the contract was signed to Dayforce less than a week later.
Workday currently provides NextGen HR services to a small number of small, high-security departments, including CSIS, CSE, and FINTRAC.
In a statement to CTV News, a spokesperson said the initiative “is something that Workday proudly supports, in line with our commitment to providing a single comprehensive user experience and accessibility in design. “This includes agreeing and meeting a set of accessibility and official language requirements.” ”
Neither SAP nor Workday filed complaints regarding the procurement process.
viable but not ready
Dayforce’s founder, David Ossip, is Canadian, and Gianluca Cairo, vice president of public sector revenue realization and strategy, previously worked for a minister in Justin Trudeau’s government.
Cairo was chief of staff to former Innovation Minister Navdeep Bains before being hired by Dayforce in 2019.
Of the $289 million the government invested in the NextGen initiative, the lion’s share, $171 million, was used to pay Dayforce to build a customized platform for the federal government.
According to Next Generation HR and Payroll Final Survey Results Report After two years of analysis, the Canadian government developed “significant” tools and infrastructure and made “significant resource investments” before 130 departments began using Dayforce, according to a paper published in February. It is necessary to do so.
According to the report, Dayforce was deemed “viable” but not ready for deployment. The company’s software solution met 85% of the government’s 582 requirements. But there was a gap of 90.
These technical holes were related to complex schedules and pay classifications across roles ranging from ship officers to nurses to prison officers. Factors such as 24-hour scheduling and temporary acting roles posed problems for Dayforth.
According to the report, 18 of these shortcomings were gaps that Dayforce “could not address at this time or with planned future product development.”
“These gaps are primarily due to a lack of alignment between proprietary GC rules and industry best practices for some HR processes that are critical to producing accurate and timely pay. Yes,” the report states.
Filling these critical holes will require restarting around 150 collective agreements with 18 unions to simplify and transfer payroll processes to the day force.
negotiation is required
Benay said the PSPC will meet with union representatives next week to explain what is needed. Some amendments may be as simple as getting all departments to agree to onboard new employees on the same day of the week, while others may involve reworking contracts to change terms to align with Dayforce. You may need to negotiate.
Jennifer Kerr, president of the Canadian Institute of Public Service Professions (PIPSC), said PIPSC wants the government to pay its employees on time, but the simplifications will “set back” 70,000 scientists. said they disagree, IT workers and professionals.
“We’re not interested in losing any rights. We collectively bargained for these rights, and it’s our right,” Carr said.
She also worries about rising costs and lengthening schedules.
“We could have helped them build something in-house, but the government chose an outsourced solution, which in our opinion would only cost more money to taxpayers.” ,” Carr said.
Benay said they are currently in the “design and build phase” and the Dayforce solution will not be “go live” until all gaps are resolved. The government has requested information from contractors for cost estimates to build a data hub that will bridge the transition to a Dayforce solution.
The federal government aims to deploy Dayforce NextGen one sector at a time in 2027. But before that, you should test all your cloud extensions and run your payment system alongside Phoenix for at least 6 months to ensure there are no glitches.
The Canadian Association of Professional Employees (CAPE), which represents 25,000 public servants, praises the PSPC’s cautious approach.
“This is about restoring trust with Canadian taxpayers that we’re not going to create another thug,” said CAPE Chairman Nathan Pryor. Pryor said CAPE members still face financial pressure from the Phoenix scandal, which cost taxpayers $3.5 billion.
“I’m glad they’re taking the time to conduct the pilot and implement things slowly. We need to be at the table and talk every step of the way…We’re still in the midst of the Phoenix disaster. Our members continue to face significant financial pressure from being underpaid, overpaid or not paid at all.”
