Phoenix: Standing Committee on Government Operations and Estimates—March 4, 2022
Document navigation for "Standing Committee on Government Operations and Estimates: March 4, 2022"
On this page
Phoenix dashboard (February 2022)
Financial transactions beyond normal workload
- January 19, 2022 : 141,000
- February 16, 2022 : 139,000
- Target : 0
Details on financial transactions beyond normal workload
The number of financial transactions beyond the normal workload for February decreased by 2,000 from January 19 to February 16, 2022. While we expect the general downward trend of the last 4 years to continue, the number of transactions processed each month varies based on a variety of factors, which may result in slower progress or even increases.
It is estimated that almost half of public servants have an outstanding transaction in progress that may or may not have a financial impact on their pay (including those served by the Pay Centre as well as non-pay centre departments). There are currently approximately 322,000 transactions ready to be processed at the Pay Centre, including:
- 219,000 transactions with financial impact, which include:
- 139,000 beyond our normal workload
- 80,000 that are part of our normal workload
- 52,500 transactions with no financial impact, or general inquirers
- 9,500 collective agreement transactions
- 41,000 transactions waiting to be closed for which employees have already received payment
Public Service Pay Centre workflow
- Total transactions received January 19 to February 16: 91,000
- Total transactions processed January 19 to February 16: 93,000
- Collective agreement transactions manually processed January 19 to February 16: 5,100
Percentage of transactions processed within services standards
- Average in 2021: 80%
- February 16, 2022: 84%
- Target: 95%
Details on the percentage of transactions processed within services standards
A total of 84% of non-collective bargaining transactions that were finalized between January 19 and February 16 met service standards. The Pay Centre me service standards 80% of the time on average in 2021, compared to 72% on average in 2020.
Public Services and Procurement Canada (PSPC) prioritizes cased that have a large impact on an employee’s pay. For example, in 2021, parental and disability leaves were processed within service standards 99% of the time on average.
Phoenix IBM and pay stabilization procurement initiatives
Key messages
- Public Services and Procurement Canada has put in place over 2,500 systems enhancements and fixes, which have helped move the pay system to a much steadier environment
- As a result, we have increased the overall system stability and improved performance in payroll processing
- We continue to reach out to experts, federal public sector unions, and the private sector for innovative solutions to help further stabilize the pay system
- For example, McKinsey & Company has provided expertise required to streamline processes and standardize work at the Pay Centre, so as to increase efficiency and reduce processing times for pay transactions, as well as to build greater capacity through new ways of working
- The work to date has resulted in substantial increases in the productivity and accuracy of work across the teams at the Pay Centre
- The work to date has resulted in substantial increases in the productivity and accuracy of work across the teams at the Pay Centre
Key data points
- Investments in Phoenix:
- the initial investment to develop Phoenix was $309 million. This included the IBM contract, other professional services contracts and program costs (example: delivery costs for the transformation of pay administration initiative)
- additional investments to ensure that public servants are paid accurately and on time total $2.134 billion. These investments are critical to ensuring adequate resources are available to continue efforts to eliminate the backlog, maintain pay delivery, support employees and stabilize pay. Moreover, these investments have resulted in greater capacity, enhanced technology and support for the workforce dedicated to processing pay transactions to eliminate the backlog
- IBM contract total values:
- for the new pay system—$545M (taxes included)
- for application managed services model for the Phoenix—$106.6M (including taxes and contingency)
- McKinsey & Company contract for accelerator services has a total contract value of $27,699,266 (taxes included)
Background
IBM contract and amendments
In June 2011, IBM was awarded the contract for the new pay system through an open and transparent bidding process with a fairness monitor. Since then, there have been 50 amendments to the original contract, for a total contract value of $545M (taxes included). The most recent amendment was in December 2020 and was required to exercise the option year to extend the current contract end date from April 2021 to March 2022 to ensure ongoing application managed services for 24/7 operational (functional and technical) support for pay. This includes software maintenance and support services essential for pay stabilization, including the upgrade of the Phoenix PeopleSoft software to version 9.2.
In May 2019, Public Services and Procurement Canada launched a competitive procurement process seeking suppliers to provide ongoing operational support for the Phoenix pay system, once the contract with IBM Canada Limited ends in March 2022.
Three firms responded to the invitation to qualify (ITQ) but only IBM met the mandatory requirements. PSPC negotiated a contract with IBM for the period of April 1, 2022 to March 31, 2023, with a value of $106.6M, including taxes and contingency. It will provide support for functional, technical, and payroll processing functions via an application managed services model for the Phoenix pay system and contains additional 1-year options that will be exercised as needed. An independent fairness monitor observed the procurement process and has not raised any fairness concerns.
Robotic process automation: Request for proposal
Robotic process automation (RPA) is one of several ongoing initiatives to help reduce the backlog and stabilize the pay system. PSPC is using RPA services to process manual transactions so that compensation employees can focus on complex cases and address more transactions in the backlog. Following a competitive process, a contract was awarded to IBM on January 19, 2021, which will allow PSPC to build on the RPA work completed to date and accelerate the automation of pay processing.
Accelerator services contract amendment
The objective of the accelerator services project is to streamline processes and standardize work at the Public Service Pay Centre to increase efficiency and reduce processing times for pay transactions. McKinsey & Company was awarded a contract in February 2020 as a result of a competitive procurement process. On May 31, 2021, PSPC amended this contract to improve process and performance across more Pay Centre teams. On December 10, 2021, PSPC amended the contract again to complete the deployment of accelerator services across more Pay Centre teams and expand the services to a new sector. Total contract value is now to $27,699,266.00 (taxes included).
Under this contract, McKinsey & Company is providing consulting services to transform ways of working, including management practices and tools, to improve both productivity and the experience of our clients and client organizations. They are also implementing strategies to increase efficiency and reduce errors, which will lead to decreased wait time for employees’ pay issues to be processed.
Phoenix overpayments
Key messages
- Recovering salary overpayments has always been part of the Government of Canada activities, even before the implementation of the Phoenix pay system
- In its stewardship role, the government has an obligation to recover outstanding overpayments. Since the launch of Phoenix, thousands of current and former federal employees have already reimbursed overpayments, or have made arrangements to do so
- We recognize that the recovery of overpayments can be stressful for those affected, and multiple measures have been put in place to support individuals experiencing financial hardship, including flexible repayment options
- The overpayment letters sent to employees provide detailed information on the pay event that led to the overpayment, as well as the steps to follow should they have questions about the overpayment amount identified
- If an employee acknowledges the overpayment within 4 weeks from the date of the letter, they will continue to benefit from and be eligible for flexible repayment measures
- This means a flexible repayment plan can be put into place and recoveries would only start when:
- all of the employee’s outstanding transactions have been addressed
- the employee has received 3 consecutive correct pay cheques
- a recovery agreement has been confirmed by the employee
Key data points
- Since the launch of Phoenix, approximately 337,000 employees have been identified as having received either an administrative overpayment or true overpayment, totalling $2.9B
- As of December 31, 2021, overpayments were repaid by approximately 222,000 of those employees, representing a total of approximately $2.3 billion in recovered funds
- As of February 3, 2022, approximately 115,000 employees have an outstanding overpayment balance. The outstanding salary overpayments stands at approximately $552 million
Background
Recovery of overpayments supports the Government of Canada’s mandate to resolve outstanding Phoenix pay system issues for public servants once and for all. Salary overpayments impact current and former public service employees across departments and agencies, and across the country.
In collaboration with the Office of the Comptroller General, Public Services and Procurement Canada has established recovery strategies:
- for current employees: priority has been given to files with overpayments from 2016, in order to protect the Crown’s right to recover these overpayments
- for pensioners: the Receiver General has put in place a strategy to recover overpayments from pension funds through the Government of Canada Pension Centre
- for former employees who left without a pension: the Receiver General is providing support and guidance to departments and agencies
In order to protect the Crown’s right to recover overpayments within the 6-year statutory restriction, active employees must first acknowledge their overpayments to access repayment flexibilities put in place by the Office of the Chief Human Resources Officer—Employee Relations and Total Compensation. These repayment flexibilities allow employees to delay recovery of their overpayments until their pay file is reconciled and they have received their correct pay for 3 consecutive pay periods.
Active employees who do not access the repayment flexibilities will be subject to recovery, as per the guidelines provided in their overpayment acknowledgement letter. Former employees are not eligible for the repayment flexibilities, and the Crown has the right to recover overpayments from first available funds.
The Receiver General and Pension Branch has resumed the collection of overpayments from pensioners previously employed by departments and agencies served by the Public Service Pay Centre.
Departments and agencies not served by the Public Service Pay Centre are responsible for recovery of funds from their current and former employees, though the Government of Canada Pension Centre does assist with recovery from pension recipients when requested.
Administrative overpayments / true overpayments
Administrative overpayments were a normal part of the pay administration process and used to ensure employees were paid accurately. They would be generated when an employee’s acting assignment was entered late and were automatically recovered at the time of the acting assignment’s retroactive payment. This allowed the pay system to automatically reconcile the difference between the regular salary rate and the acting salary rate in subsequent pay periods without affecting the employee’s pay. As of October 2020, a new process was put in place and these type of overpayments are no longer created for this purpose.
True overpayments usually occur when certain pay transactions are not submitted or processed promptly. Some situations are related to late entry / late processing where timeliness is key. Some situations are related to unforeseen work-life events. This is a normal part of day-to-day compensation operations.
Next generation human resources and pay initiative
Key messages
- Every public servant should be paid accurately and on time, every time
- Next generation (NextGen) human resources (HR) and pay initiative is exploring solutions for a future human resources and pay solution that meets user needs and follows modern people management processes
- The initiative is aiming to develop a user-centric, accessible, and enterprise cloud-based solution that will meet the complex needs of the Government of Canada now and into the future
- Work is underway with the government HR and pay communities to modernize and streamline HR and pay processes to align with commercially available software
- The NextGen HR and Pay Team has engaged a broad representation of more than 1,400 participants across the Government of Canada
- Over the last year, a series of pilot tests took place with the Department of Canadian Heritage. This testing was done outside of the current pay system, so no employee’s pay was affected
- NextGen HR and pay is also working with Ceridian on delivering options and recommendations for a new integrated HR and pay system for Government of Canada employees. Recommendations are expected to be delivered to the Treasury Board Secretariat in 2023
Key data points
- Over 890 participants have engaged in over 100 working sessions since September 2020
- Over 500 participants have participated in ask me anything sessions
- Budget 2019 allocated $113.1M in funding for the Next Generation HR and pay initiative until 2023, which, as of February 28, 2022, includes the following contracts:
- Ceridian Canada Ltd is valued at $18,479,003 (taxes included) and is to deliver the services to support the second phase of design and experimentation
- SAP Canada Inc. was valued at $6,455,757 (taxes included) and was for the first phases of exploratory and is no longer active
- Workday is valued at $29,312,395 (taxes included) and involves examining the future viability of implementing a human capital management software as a service solution in the cloud with a focus on a higher security cloud to support the Government of Canada’s high security organizations
Background
Budget 2018 announced the government’s intention to move away from the current pay system and begin the development of a new one that will be better aligned with the complexity of the federal government’s human resources and pay structure.
In September 2019, the government announced a $113.1 million investment to co-design and deliver pilot projects for the Next Generation human resources and pay solution. These pilot projects will test potential solutions against the real complexities of the federal government’s human resources and pay systems. This investment re-affirms the Budget 2019 commitment to move away from the Phoenix pay system, toward one that is better aligned to the current and future needs of Canada’s world-class public service.
The government also announced, at that time that it had selected SAP, Workday and Ceridian as the vendors deemed qualified to deliver a NextGen HR and pay solution for the Government of Canada.
In March 2020, after extensive evaluation, and testing, it was announced that SAP had been selected to work with on a pilot for a new HR and pay solution. SAP was selected through a rigorous evaluation process which was open and transparent and placed users at the centre. The evaluations involved elements such as measuring vendors against digital, privacy and security standards as well as testing of hundreds of HR and pay scenarios, both simple and complex.
Effective April 1, 2020, leadership for NextGen HR and pay was transitioned from Treasury Board of Canada Secretariat (TBS) to Shared Services Canada (SSC). The chief human resources officer at TBS remains the business owner and a key collaborator of the NextGen HR and pay initiative.
On October 14, 2020, the selection of the Department of Canadian Heritage for the exploratory phase of the Next Generation HR and pay initiative was announced. Canadian Heritage was selected as the pilot department for exploratory phase because their organization provides a good representation of the government’s human resources complexities, including multiple occupational groups, regional representation, overtime, and other considerations.
Following successful completion of the exploratory phase in April 2021, the Government of Canada pivoted to a new vendor. On September 14, 2021, the Government of Canada signed a contract amendment with Ceridian for the next 18 months for the design and experimentation phase of the NextGen HR and pay initiative.
On July 27, 2021, the Government of Canada announced the expansion of testing to include the Department of Fisheries and Oceans and the Canadian Coast Guard and Canada Economic Development for Quebec regions.
All 3 vendors remain qualified to work with the government in the future for HR and pay solutions. This affords the government maximum flexibility to access the solutions of multiple, best-in-class vendors which is critical to the NextGen HR and pay approach.
Any testing undertaken will not affect employees’ actual pay. All testing for the NextGen HR and pay initiative will continue to take place in parallel with existing HR and pay systems and all testing has been designed to ensure the protection of privacy and personal information.
Throughout this process, the NextGen HR and Pay Team is engaging with public service employees, leaders, HR advisors and technical specialists, the private sector and other governments, as well as working hand-in-hand with bargaining agents in the development of a user-centric HR and pay solution.
As part of this pilot initiative, the NextGen HR and Pay Team has engaged a broad representation of more than 1400 participants across the Government of Canada, through working and ask me anything sessions. These activities form the basis for the NextGen HR and pay’s exploratory phase, and they will inform the next steps in the initiative.
Ongoing stabilization of the current Government of Canada pay system remains a top priority for the government and is being managed by Public Services and Procurement Canada.
Document navigation for "Standing Committee on Government Operations and Estimates: March 4, 2022"
Page details
- Date modified: