Audit of Human Capital Management – Management Action Plan
Management response to the audit
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Management accepts the audit findings and recommendations, and has identified planned actions in response to each recommendation as outlined below.
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Subsequent to the launch in February 2022 of OSFI’s 2022-2025 Strategic Plan, which outlines our goals and priorities for the next three years, and a major reorganization effective April 1, 2022, the Superintendent announced in June 2022 that FY 2022-2023 will be dedicated to OSFI’s “patient, foundation-building year”. This means that, during 2022-23, OSFI will focus on building the structure, strategies, plans and tools needed to support its multi-year transformation effort. There are four target areas for the foundation-building year:
- Organizational structure and capacity
- Operational planning and clarity
- Engagement and enablement
- Key frameworks
Being a key player in the success of OSFI’s transformation, HR is concentrating its efforts in 2022-2023 on: completing each sector’s reorganization; advancing OSFI’s desired culture change; leading the implementation of our new hybrid work model; assisting hiring managers to fill the 200 net new positions OSFI is adding; developing an outline of OSFI’s new Human Capital Strategy; and, negotiating new collective agreements with its two unions. Therefore, some targeted actions found in this management action plan are planned for FY 2023-2024.
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Regarding Recommendation 6, OSFI will work in close collaboration with the Next Generation Human Resources and Pay (NextGen HR and Pay) team of Shared Services Canada (SSC), which is responsible for testing solutions for a reliable, integrated HR and pay solution for the Government of Canada. NextGen HR and Pay will be a user-centric, accessible, and flexible cloud-based solution that meets the complex needs of the Government of Canada and the diverse needs of federal departments, agencies and employees.
Recommendation 1 (Medium risk)
HR should develop and document a cohesive Human Capital Management approach, which integrates existing programs and processes, with centralized tools and guidance, and periodic reviews to ensure they remain current.
Accountability:
- Director, Corporate HR
- Chief Human Resources Officer
Target overall completion: Q4 2023-2024
Milestone 1
Target milestone completion: Q4 2022-2023
HR will develop a formal outline of OSFI’s new Human Capital Strategy (HCS). (HCS Outline)
Milestone 2
Target milestone completion: Initiated in Q3 2022-2023
In order to develop the Human Capital Strategy, HR will undertake a thorough Environmental Scan covering:
- Assessment of the previous HCS (Q1 2023-2024)
- Assessment of OSFI demographics and other key HR information (Q1 2023-2024)
- Review HR organizational structure, functions, programs, responsibilities (Q1 2023-2024)
- Review HR risks and gaps (Q2 2023-2024)
- Review survey results and other relevant insights (Q2 2023-2024)
- Review of comparable HR benchmarks (Q3 2023-2024)
- Consideration of OSFI’s Transformation including Blueprint, Strategic Plan and Operational Plan (Q3 2023-2024)
Milestone 3
Target milestone completion: Q2 2023-2024
- The information from the environmental scan will be analyzed and synthesized to establish priority areas of work (HR Strategies)
- Timelines and Performance Measures will be added including targets (Performance Measures with targets)
- Accountabilities and responsibilities will be identified
Milestone 4
Target milestone completion: Q4 2023-2024
- Various consultations within OSFI will be undertaken, as appropriate
- Communications Plan will be established
Milestone 5
Target milestone completion: Q3 2023-2024
Notably,
- HR will develop the HCS reflecting elements raised in the recommendation; for instance, the strategy will communicate existing (i.e., ongoing operational) HR programs and how they are integrated with, and complementary to, the HCS.
- The HCS will include a performance measurement approach to monitor progress during the strategy’s implementation, identify any necessary adjustments, and report on results achieved to governance committees and employees. The approach will identify the frequency of reporting, which will vary based on the different indicators and metrics (eg semi-annually, annually).
- HR will continue to work with Communications to make centralized HR tools and guidance known and accessible to OSFI’s managers and employees. HR will review these tools and guidance for continued relevance and adequacy at least every 3 years.
Recommendation 2 (Medium risk)
HR should develop a performance measurement strategy for Human Capital Management, including identifying performance indicators, measurement guidelines, and reporting mechanisms to senior management and governance committees.
Accountability:
- Director, Corporate HR
- Chief Human Resources Officer
Target overall completion: Q3 2023-2024
Milestone 1
Target milestone completion: Q3 2023-2024
- As part of the design and development of the new HCS, a performance measurement approach will be developed. HR will review its current performance indicators and metrics, including targets and tolerances, and replace or modify them as required.
- HR will report results to senior management and governance committees semi-annually or annually (depending on the indicator or metric), or based on the reporting frequency set by the Strategy and Governance Division, Strategic Governance Office, and Audit Committee Secretariat.
Recommendation 3 (High risk)
HR should establish an organizational risk management approach for Human Capital Management, which integrates human capital risk into strategic planning.
Accountability:
- Director, Corporate HR
- Chief Human Resources Officer
Target overall completion: Q2 2023-2024
Milestone 1
Target milestone completion: Q1 2023-2024
OSFI’s Human Capital Risk details can be found in the following existing documents:
- Risk #2 in the Risk Lens.
- Sub-risks 2.1-2.6 in OSFI’s Risks and Tolerances framework
Milestone 2
Target milestone completion: Q2 2023-2024
- As part of the upcoming development or reviews of OSFI’s enterprise-wide strategic planning, risk appetite, risk management, and performance measurement and governance reporting frameworks (led by the Strategy, Risk and Governance Sector, SRGS), HR will work with colleagues from SRGS and the Transformation Office to articulate human capital risks and tolerance levels.
- As part of the development of the new HCS, HR will identify gaps and risks in human capital management. Risks will be mitigated and gaps will be filled through the HCS priorities and plans, and measured and monitored through the performance measurement approach.
Recommendation 4 (Medium risk)
HR should review and establish roles and responsibilities related to Human Capital Management, ensuring they are reflective of people managers’ actual accountabilities across the organization, and seek agreement for these accountabilities from senior management.
Accountability:
- Director, Corporate HR
- Chief Human Resources Officer
Target overall completion: Q4 2023-2024
Milestone 1
Target milestone completion: Q4 2023-2024
- HR will clarify organizational roles and accountabilities relating to HR through a tool such as a RACI matrix (Responsible; Accountable; Consulted; Informed). (Document outlining HR roles and accountabilities)
- HR will seek Senior Management agreement on the proposed roles and accountabilities.
Recommendation 5 (Medium risk)
HR should ensure people managers are aware of and understand their roles, responsibilities and accountabilities, and that they have access to centralized tools and guidance for additional support.
Accountability:
- Director, Corporate HR
- Chief Human Resources Officer
Target overall completion: Q4 2023-2024
Milestone 1
Target milestone completion: Q4 2023-2024
In addition to the actions committed toward Recommendation #4:
- HR will review and update HR policy instruments (which specify roles, responsibilities, and accountabilities), in accordance with OSFI’s Framework for Corporate Policy Instruments. The Corporate Planning Division sets an annual review schedule, monitors its progress and reports on its achievement to the Executive and Audit Committees. (Updated HR policy instruments as per plan)
- HR will work with Communications to clarify to people managers their roles and responsibilities through messaging and/ or information sessions when needed. (Communiques)
- HR will promote awareness, visibility and access to HR’s suite of policies, guidelines, tools, guidance, resources and learning & development offerings on OSFI’s intranet through dedicated hubs for all employees or managers.
- HR will advertise training related to HR matters to support people managers in their roles. (Training Offerings)
Recommendation 6 (High risk)
HR should update existing systems or implement new solutions to enable efficient data analysis and reporting processes, and leverage opportunities for automation where possible to minimize the associated resource burden.
Accountability:
- Director, Corporate HR
- Chief Human Resources Officer
Target overall completion: Complete
Milestone 1
Target milestone completion: Complete
- HR had previously identified the need to modernize its HR Systems and OSFI’s most recent budget includes funding to effect this work over the next 3-4 years, in collaboration with IMIT and the Government of Canada’s Next Generation HR & Pay solution.
- Management is of the view that this funding, and the initial planning that led to the Executive Committee’s approval to proceed with this important systems modernization initiative, satisfy the audit recommendation.
Additional guidance
- The number of milestones will vary based on the actions required. While the template has three milestones populated for each recommendation, this is not considered a suggested number, and proposed actions may have more or fewer milestones.
- For both date columns, it is suggested to use ends of quarters and fiscal years (ex. “Q4 2021-22”) rather than specific dates (ex. “March 1, 2023”), unless there is a predetermined date that has already been accepted.
- The final Target Milestone Completion should be aligned with the Target Overall Completion.