Staffing Leadership: Temporary Help & the Federal Government

Tuesday, October 26, 2010

Federal Government & the THS Supply Arrangement

The past 24 months have been tumultuous times for suppliers operating under the federal government’s THS supply arrangement in the NCR. The recessionary economy combined with changes in the government’s procurement rules have resulted in unprecedented business challenges and a real threat to some staffing companies whose core business is the supply of temporary help services to the public sector.

While suppliers, workers and buyers are all trying to adapt to the changes, the government’s procurement model for temporary staffing, users of the services and the industry remain under constant scrutiny and duress because of several converging and influential forces. The following summary briefly describes some of the issues, the forces at play, ACSESS involvement and the current ACSESS position.

Temporary Help is a Valuable Service

For starters, managers within government with budget and performance objectives know that Temporary Staffing Services, acquired through the PWGSC “ THS “ procurement vehicle, is the most efficient, cost effective and value based solution available to solve their peak workloads, staff shortages, skill shortages and projects. Thousands of various government managers independently come to the same conclusion over and over again. There is a need for temporary help; there are legitimate motives driving the procurement of temporary help; and temporary staffing providers deliver a high quality service. These are undisputed facts.

THS - Right of First Refusal – The Critical Flaw

In May of 2009, PWGSC implemented a new rule that requires buyers within the federal government, to issue their purchase requests (Call-ups) to the lowest priced suppliers, with no special consideration allowed for “value issues” like availability of resources, past service experience, call-backs of previously assigned temporary workers, fit, or comparative skills of the available workers through different suppliers. Commonly referred to as the “right of first refusal”, this rule requires buyers to take several unnecessary and time consuming steps to attempt to buy the lowest price resource from the THS price list or they must document their justification for not buying the lowest priced supplier. This model is failing! It is the source of a variety of unintended consequences and undesirable buyer and supplier behaviors. The “right of first refusal” relies upon three false assumptions. 1) all workers and all staffing companies are indiscernible, homogeneous commodities; (2) lowest priced and lowest wage worker = greatest value; 3) buyers cannot be trusted to make best value decisions from a list of vendors that are pre-selected by PWGSC and from predetermined prices that are set weekly through price competitions.

The “right of first refusal” rule has been implemented in the regions outside the NCR with better flexibility and cognizance for providing proper value to the crown. Nevertheless in spite of the existence of a more value emphasized approach the relative constraints of the system has led to widespread "category manipulation" by having to call for a much higher category to ensure a billing rate that can support a pay rate to attract the suitable candidate. Therefore the regions are not experiencing similar failings. The undesirable consequences and behaviors are exclusive characteristics to the NCR which is the only region where the “right of first refusal” is being pursued with such inanely excessive vigour.

THS – Advisory Committee

An Advisory Committee comprised of several representatives from PWGSC, client departments, ACSESS NCR chapter and non-ACSESS industry representatives has been meeting regularly for several years to monitor, evaluate and improve Public Works THS procurement model in the NCR. Minutes of each meeting and a list of committee members since November 2006 are available for review at http://www.tpsgc-pwgsc.gc.ca/app-acq/sat-ths/rcc-acm/2010-07-20-eng.html . Our ACSESS committee representatives have done an excellent job of raising issues, presenting our positions, making recommendations and keeping the issues alive and prioritized. You’ll note from most recent meeting minutes that our current focus is on improved communications, training and best practices in an effort to offset the harmful declining wages rates resulting from the current flaws in the THS model. Our committee representatives have consistently delivered the message that “right of first refusal” does not work. We repeatedly urge PWGSC to abandon the ”right of first refusal” policy and allow buyers to apply their own unique needs criteria to their selection process, so long as they buy from the list of authorized suppliers at the approved pricing. Several alternatives have been offered and discussed. PWGSC has resisted our requests maintaining that the principle of "Right of First Refusal " constitutes good contracting policy.

After more than 20 years of ACSESS working with PWGSC on procurement policy, it is a known fact that bureaucrats are constantly influenced and pressured by a confluence of disparate factors which may involve unions, legal counsel, media, Public Service Commission, Auditor General, competition bureau, political forces and other parties that have motive or responsibility to scrutinize and influence government policy and practices.

Treasury Board Meeting

In an effort to address the contention that the THS system and specifically the “right of first refusal” is a Treasury Board issue, ACSESS representatives from the NCR and National Government Relations committee met in April 2010 with Roy Rempel, then Policy Advisor, Treasury Board - Office of the Minister Stockwell Day. Mr. Rempel has since moved to the Prime Minister’s Office. In the April meeting we submitted a detailed report http://www.acsess.org/CAPITAL/PDF/Treasury-RempelR1-b.pdf describing our experience and concerns with the flawed THS system. Mr. Rempel expressed his interest in and his understanding of the issues. He assured us that Treasury Board had no specific role in the development of the THS system or in the “right of first refusal” policy. He encouraged us to deal at the appropriate senior levels at PWGSC for a resolution.

Senator Pierrette Ringuette

In June of 2010, The Hon. Senator Pierrette Ringuette from New Brunswick requested that the Senate Standing Committee on Finance be authorized to examine and report on the use by the Government of Canada of temporary staffing agencies to fill Public Service jobs. That, in conducting such study, “ the committee take particular note of 1) The approximate $300 million annually that is charged to the Canadian taxpayer by agencies to staff Public Service positions; 2) Whether the use of such agencies has allowed the circumvention of geographic, linguistic and merit rules in the hiring process; 3) The cost to Public Service employees for the use of services provided by temporary staffing agencies; 4) Its impact on the ability of a sound, stable Public Service to provide services to Canadians”

It seemed obvious to industry insiders that she had bias with a predisposed conclusion to any study that might be undertaken. It also seemed transparent that points 1, 3 & 4 are more like statements of her desired findings rather than the objects of study. The Senator’s motive is held within point #2. ( ie. “use of such agencies has allowed the circumvention of geographic, linguistic and merit rules in the hiring process”). The reference to “geographic” and “linguistic” criteria is intended to mean that the Senator wishes to create or emphasize easier access to high paying public service jobs for the predominately French speaking constituents of her province. Moreover, if the government was forced to reduce its use of temporary help in the NCR (and other forms of temporary hiring such as casual services) then the alternative would be an advantage to those constituents living within a predominately bilingual population such as the Senator’s home riding.

Subsequently, parliament requested that the Public Service Commission, under the direction of President Maria Barrados, conduct a study into temporary help services. The PSC completed their study during the summer months and tabled their findings in parliament in early October 2010. As a result, Senator Ringuette withdrew her request for the Senate to prepare an independent study. The Senator also gave notice of her intention to introduce a Bill that would address the issues as she sees them. It is unclear what recommendations the Senator might make in her bill but we anticipate a thinly veiled effort to use the Public Service Employment Act to achieve her objectives.

Public Service Commission

The Report prepared by the Public Service Commission can be found at http://www.psc-cfp.gc.ca/adt-vrf/comrpt-rapter-y-eng.htm#n2010 and http://www.psc-cfp.gc.ca/arp-rpa/2010/index-eng.htm
The Public Service Commission regularly audits and studies various aspects of the governments hiring practices as a core responsibility within its mandate which is “to safeguard the integrity of the public service staffing system as well as the political neutrality of the public service. The PSC recruits qualified Canadians to the public service and develop policies to ensure that appointments respect the core appointment values of merit and non-partisanship, as well as the guiding values of fairness, access, transparency and representativeness.”
Included with the list of studies (2009-2010) prepared by Public Service commission, several similar or related topics include:

Within, almost all of these studies, the Public Service Commission address a recurring theme whereby they maintain that regardless of whether an individual’s experience is gained through Term, Casual, Temporary Help, Student Employment Programs, or Acting Appointments, the candidates with prior government experience have an “Unfair” advantage over those without such experience.
In these reports and within subsequent reporting to parliament, President Barrados also placed emphasis on the following:

Temporary Help, Casual and Term assignments are important tools for managers to have the flexibility and ability to get someone for a short term and;
Patterns of people on temporary help assignments, then casual for a while, term assignment then back to temporary help suggest there may be an ongoing employment relationship which is best served by the Public Service Employment Act.
She does “not think we need more rules and process. I think we have enough. People must better understand the tools available to them.”

ACSESS representatives from the NCR local NCR-THS Committee and representatives from our National Government Relations Committee met on Tuesday October 5th, 2010 on conference call with the PSC Study team headed by Terry Hunt, Director General, Data Services and Analysis. The objective of the call was for the study team to describe the Public Service Commission’s study methods and to provide clarity and interpretation of study findings and remarks.

On Friday October 15th, 2010 ACSESS representatives met directly with President Barrados and Terry Hunt in the President’s Ottawa office to discuss the interpretation of the finding and next steps for government and ACSESS. From that meeting we learned the following;

The Public Service Commission is not likely to recommend any future policy changes, legislative changes or rule changes that will effect procurement policy on Temporary Help
The PSC may ask for permission to take a future role in the data collection and study of temporary help is it does with other government hiring practices
The President would report the study results as a subset of the complete Annual Report to the Standing Senate Committee on National Finance (Completed Tuesday October 19, 2010)
The PSC would have no further role or intervention responsibilities on this issue following the Annual Report.

It is important to note that ACSESS does not contest the validity of the data collected by the Public Service Commission. As a matter of fact, the data seems to support the industry’s long held contention that managers within government rely upon Temporary Services to gain access to highly qualified, experienced and skilled workers and that they often transition these same resources to government casual, term and indeterminate positions.

ACSESS does challenge some of PSC interpretations of the data and some of their assumptions regarding the meaning of the data. While the Commission openly maintains that their study was never intended to determine the value of Temporary Services relative to the other options, we are specifically frustrated by the fact that the object of the report intentionally omitted the issue. The report fails to address in any detail driving the need for temporary help including the legitimate motives or the high quality of service. We maintain that the data reinforces that fact that thousands of various government managers independently come to the same conclusion over and over that Temporary Services are the most efficient, cost effective and value based solution available to solve their peak workloads, staff shortages, skill shortages and projects.

Media & Public Relations

The topics of employment, unemployment, the economy, government procurement policies, labour issues and the staffing industry are all issues that frequently find their way into the press, mostly because they touch everyone and because of the diverse ideological spectrum on these issues. Controversy and thought provoking content sells.
In recent months, Kathryn May of the Ottawa Citizen, has delivered her unique perspective on a variety of industry related topics. Kathryn May covers the Ottawa Citizen’s government beat and she has a penchant for discovering (or creating) issues related to government operations, labour relations and procurement policy. Editor Andrew Potter once wrote of Kathryn May, “she strikes fear into the bureaucracy like few journalists can or do; I’m not kidding nor exaggerating when I say that Kathryn May is a weapon of democracy.”
In an article published in the Citizen on October 5, 2010 May misquoted the PSC report incorrectly stating that the “study found 73 per cent of temporary workers in its sample ended up with term or permanent positions” when in fact the report stated that one in 5 (20%) eventually landed these positions. In May’s typical controversy seeking style, she also stated in her article that spending on agencies has “exploded” while President Barrados specifically denied the use of the term in her report or her interview with May.

On behalf of the industry, ACSESS Executive Director Amanda Curtis responded to the Ottawa Citizen with a published editorial letter on October 12, 2010. You can find a copy of our response at http://www.ottawacitizen.com/life/hires+temps+most+effective+staffing+
solution/3655565/story.html?id=3655565.

We can expect that Kathryn May and other journalists will continue to report on industry related topics and we will continue to respond in an appropriate and measured fashion under the names of our Association Staff, Amanda Curtis and Mary McIninch so that individual local members will not feel targeted or scrutinized as a result of speaking out on behalf of the entire association or industry.

Closing remarks

In closing, we will continue to defend the interests of industry at both the local and national levels. Locally through the THS Advisory committee and nationally by corresponding regularly with appropriate senior bureaucrats (PWGSC, Treasury Board, PSC and HRSDC) and elected officials.

The THS Advisory Committee comprised of several representatives from PWGSC, client departments, ACSESS NCR chapter and non-ACSESS industry representatives will continue to monitor, evaluate and work towards improving Public Works THS procurement model in the NCR. Our national office will continue to correspond with senior bureaucrats, senators and elected officials in support of local efforts. We will ensure that our message is effectively communicated to key decision makers in both the political and bureaucratic sectors.

I would like to take this opportunity to thank you for your continued support of ACSESS.

Steve Jones, National President

National Capital Region Government Relations Committee:
Chair - Jeremy Ingle, SPI Consultants
Committee Members - Steve Jones, The People Bank
Martin Chenier, Lannick Group of Companies
Isabelle Copeland, Harrington Staffing Services
Meredith Egan, The AIM Group

National office contact:
Mary McIninch, LL.B (Barreau du Québec)
Director, Government Relations/Directrice, Affaires Gouvernementales
Phone/Tél. : 905-826-6869/1-888-232-4962 Fax/Télécopieur : 905-826-4873
2233 Argentia Road, suite 100, Mississauga, ON L5N 2X7
www.acsess.org

Tuesday, October 26, 2010

Temporary Help & the Federal Government

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