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Clients’ staff can use the digital wallet and prepaid payment card, issued by the Central Bank of Kansas, to spend wages earned since their last payday. The Toronto-run HR software company won’t charge workers or employers transaction fees, although they may be charged for using the card outside the designated ATM network. (The Logic)

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Talking point: Retail and service giants with lots of low-wage employees have adopted third-party apps that provide a similar cash-before-payday service. But some policymakers say the percentage or monthly fees these startups charge aren’t much better than the payday lenders they claim to be trying to replace. Ceridian’s no-fee model should dodge that criticism; clients are already using its software to run payroll, making the feature easier to adopt than a third-party service.

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The payroll and workforce-management software company will hire engineering, R&D and consulting employees at its operational headquarters in Toronto, as well as in Ottawa, Montreal, Winnipeg, Halifax and Calgary. The firm said it has averaged 300 new Canadian recruits a year since 2013. (The Logic)

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Talking point: Ceridian is staffing up after a significant growth year; last week, it disclosed 2019 revenues of US$569.7 million for its flagship Dayforce product, up 30.2 per cent. While the U.S. and Canada accounted for 99.6 per cent of revenue in 2018, the firm is now growing rapidly in non-North American markets. In September 2019, CEO David Ossip told The Logic Ceridian planned to launch Dayforce in more than a dozen new countries over the following three years, in part via acquisitions. While those deals bring in locally knowledgeable staff to sell its products, the firm spends up to $2 million on R&D and updates to prepare the system for a new market. Growing its Canadian development teams could help with those efforts, as well as its pursuit of clients with increasingly larger workforces.

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The Toronto-run technology firm hit US$69.65 in late afternoon trading, a 63 per cent increase from its Oct. 22, 2019 US$42.67 price. (The Logic)

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Talking point: Ceridian outperformed the S&P/TSX Capped Information Technology Index in 2019, which tracks the country’s biggest publicly traded technology firms. It isn’t listed on the index because it’s headquartered in Minneapolis, but if it were, its US$10-billion market cap would make it the fifth most valuable firm on the index. That’s well ahead of US$3.7-billion Descartes Group, but trailing US$12-billion OpenText. The company’s bull run over the last few months has included launching a secondary public offering, Citigroup upgrading its stock from “neutral” to “buy,” and RBC Capital predicting the firm’s stock would outperform the market. In October 2019, Ceridian CEO David Ossip spoke with my colleague Murad about his plans to expand internationally and grow his firm’s public-sector business. The public-sector market is significant compared to the firm’s current revenues, and Ceridian is one of three finalists to build a replacement for the federal payroll system. And in July, the company hired Gianluca Cairo, former chief of staff to Innovation Minister Navdeep Bains, to lead a broader public-sector strategy.

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Gianluca Cairo, chief of staff to Innovation Minister Navdeep Bains, will start in mid-August at the publicly traded tech company, which is headquartered in Minneapolis but run from Toronto. His appointment was cleared by the federal ethics commissioner. (Globe and Mail)

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Talking point: Ceridian’s primary users are U.S. businesses—the country accounted for 67.8 per cent of the firm’s US$746 million in revenue in 2018. The public sector represents a new market for the firm, and it’s been shortlisted for a major contract in Canada. In June, the federal government announced that the firm was one of three finalists, along with CGI Group and Oracle, to build a replacement for the Phoenix payroll system. Cairo was chief of staff to then-public services minister Judy Foote when the platform was activated in February 2016; 40 per cent of federal employees subsequently faced pay problems as a result of the new system. Cairo has experience at another Canadian-run tech firm with large operations in the U.S. Before moving to Ottawa following the Liberals’ 2015 election victory, he was an executive at Altus Group, a Toronto-based real estate data and software company that did 30 per cent of its business in the U.S. that year.

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The three qualified vendors were chosen from a five-firm shortlist that also included CGI Group and Oracle, following user testing exhibitions and feedback from government employees. The firms will run pilot projects with government departments later this year. More than one may be chosen to provide the final payroll technology. It will replace the Phoenix system, which was turned on in 2016, and caused payroll problems for 40 per cent of government employees. (The Logic)

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Talking point: The selection of a new payroll system is the most high-profile test for Ottawa’s new technology procurement process, spearheaded by Chief Information Officer Alex Benay. Instead of a single, big-money, multi-year contract awarded to create a solution across all of government at once, he wants to use an “agile” process, with software companies proposing solutions and providing working prototypes to test in small rollouts. While Benay’s boss, Treasury Board President Joyce Murray, has insisted the new system isn’t a cost-cutting measure—a goal the government said was one of the factors in the failure of Phoenix—it could be less expensive than setting up Phoenix has been. In May, the Parliamentary Budget Officer estimated it will cost $57 million to set up, and up to $106 million a year to run. In June 2018, the government forecast that fixing Phoenix will cost another $2.5 billion, on top of the $1.1 billion it had already spent.