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NZTA kicks off payroll search as government demands improvement

Agencies buying payroll systems face new oversight aimed at ensuring compliance and delivering value
Chris Hipkins, minister of state services.

Chris Hipkins, minister of state services.

The New Zealand Transport Agency (NZTA) is in the market for a new human resources and payroll system as government is demanding better results from such investments.

NZTA is specifying that any system selected is able to comply with the government's "common process model", which was developed by Inland Revenue. 

The common process model was adopted more broadly during the preparation of the 2019 Budget, which included an allocation of $82.3 million to fix historic calculation errors and payroll systems in agencies.

At the same time, Minister of State Services Chris Hipkins released new documents last month outlining the government's drive to improve government payroll systems in the wake of an August 2018 report by the Holidays Act Taskforce.

Many government agencies and private businesses, most recently McDonald's, have been misunderstanding and misapplying the law in relation to holiday pay calculations and face big bills to compensate underpaid staff and fix their systems.

Because changes to the law are still some way away, Hipkins has implemented a system-wide programme to take an oversight and coordination role, including over payroll system procurement and implementation projects. 

"This programme will ensure that agencies have more effective and consistent payroll processes through alignment with a common process model that will be kept current with good practice and legislative requirements," the papers explain. 

"It will also deliver on-going cost savings to government by removing the need for agencies to: design bespoke payroll processes, manage costly and lengthy procurement processes, and invest in complex configurations of payroll systems."

The government chief digital officer, State Services Commission, NZ Government Procurement and the Ministry of Business, Innovation and Employment were expected to report back jointly to the government by the end of this month to report on progress and further steps that may be needed.

NZTA, which employs over 1600 staff, is specifying a software as a service system (SaaS) is required using one or more of four potential configurations: delivery of both HRIS with an insourced payroll; delivery of HRIS with an outsourced payroll, delivery of HRIS only, but integration to the Transport Agency’s payroll must be possible, and; delivery of an insourced or outsourced payroll only, but integration to an HRIS.

The agency's preference is one of the first two options, a single solution with an integrated payroll. However, if the solutions provided by the market do not meet its requirements, then solutions provided in configurations three and four will be considered.

"We are seeking an integration partner to identify the optimal configuration of these services and to work with us to deliver the best solution for the Transport Agency," a tender said.

"We are seeking a partner who will prime the proposed responses working either alone or with other vendors in the market to provide us with the best solution."

The contract is expected to start on 1 April 2020, followed by a verification phase, detailed design and then phased implementation of the solution over 12 months.