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Ottawa kicking the tires on Dayforce as replacement for troubled Phoenix payroll system

The federal government has been kicking the tires on Dayforce, the human capital management platform from the company formerly known as Ceridian, as it searches for a replacement for its beleaguered Phoenix system.

Ottawa said it began testing Dayforce in 2022, putting it up against the “complex HR and pay landscape that currently exists across federal departments and agencies. So far, it likes what it sees from the off-the-shelf system.

“Testing has demonstrated that Dayforce is a technically viable option for the next modern HR and pay system,” Public Services and Procurement Canada said in a press release. “However, to ensure best results, improvements to the way the federal public service manages HR and pay processes will be required.”

That includes simplifying and standardizing processes across departments and agencies, consolidating employee records, and ensuring government-wide readiness and capacity prior to launching a new system.

It said Dayforce provides most of the government’s critical HR-to-pay capabilities and meets 85 per cent of in-scope business requirements.

Back in 2021, Ottawa signed an eight-year, $16.9-million contract with Dayforce to run a pilot project for four government departments.

420,000 employees, $36 billion payroll

Ottawa’s payroll is massive: 420,000 current and former employees paid bi-weekly, the government said. In 2023, this represented about 13.1 million payments, totalling approximately $36 billion.

It also has to handle almost 150 different collective agreements, representing employees from more than 100 departments and agencies.

As announced in 2018, the purpose of exploring a new HR and pay solution is to assess the viability of using a digital solution that is mobile and accessible and will be built on the foundation of users’ needs and modern people management processes, the government said.

“The (government) has traditionally customized its systems and solutions to meet its complex requirements rather than adopting leading practices and common business processes,” it said in its Final Findings Report. “This approach has resulted in challenges, including most recently with the current pay system (Phoenix).‌”

“To address this, the (government) has committed to examining options to replace the current pay system, including an intention to transition away from the complex array of existing legacy systems and non-standardized business practices and onto the next generation of the federal government’s integrated HR and pay system,” it said.

Employees give cash for ‘pain and suffering’ of old system

Back in 2020, the Public Service Alliance of Canada — the biggest of the civil service unions — said each of its 140,000 members was given $2,500 to compensate them for “pain and suffering” caused by the Phoenix pay system, which was underpaying, overpaying and in some cases not paying employees at all.

“Public servants deserve to be paid accurately and on time for their work. We are continuing to take action to ensure that we are improving current pay operations, while also moving toward a system that meets the needs of the Government of Canada now and in the future,” said Jean-Yves Duclos, Minister of Public Services and Procurement. “Exploring a new, modern and effective system is an opportunity to reimagine how services could be delivered in a fully digital environment.”

To date, Ottawa has engaged with 4,750 participants from 50 Government of Canada organizations — including employees, managers, HR professionals, compensation advisors and administrators who would use the new solution.

“The government will always take steps to ensure that all public service employees are paid accurately and on time,” said Anita Anand, president of the Treasury Board. “We will continue working with all partners, including bargaining agents, to simplify human resources and pay processes to ensure that all efforts contribute to the success of a new employee-focused human resources and pay system.”

View the Final Findings report online.