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Focus On Series

Ontario Power Generation Human Resources

Ontario Power Generation Human ResourcesAudit Summary

Publication Date:
December 2013

Audit Office:
Office of the Auditor General of Ontario

Link to full report:

Audited Entities

  • Ontario Power Generation

Audit Scope and Objectives

  • To assess whether Ontario Power Generation (OPG) has adequate procedures and systems to:
    • ensure that its human resources are acquired and managed with due regard for economy and efficiency, and in accordance with applicable policies, legislative requirements, contractual agreements and sound business practices; and
    • measure and report on its results in this regard.

Audit Criteria

  • Not publicly available.

Main Audit Findings

  • OPG initiated a Business Transformation project in 2010. Its target is to reduce staffing levels by 2,000 employees through attrition by 2015. Between January 2011 and April 2013, OPG had reduced its staff by about 1,200 employ­ees. Although OPG projects that it will meet its target by the end of 2015, with the number of staff it needs to operate expected to drop by almost 50% by 2025, the auditors believe it will continue to face signifi­cant challenges in making necessary adjustments.
  • OPG’s overall staffing levels have gone down by 8.5% (from about 12,100 in 2005 to 11,100 in 2012), but the size of its executive and senior management group (directors, vice presidents and above) has increased by 58% (from 152 in 2005 to 238 in 2012). Many respondents to the survey questioned the rationale of reducing overall staffing levels while creating a “top-heavy” organization.
  • OPG has reduced staffing levels at its nuclear facilities since 2011. Even after cuts, one of the most overstaffed areas in 2013—facility maintenance, janitorial and custodial servi­ces—was still 170% (or 187 staff) above the industry benchmark based on data from other nuclear operators in North America. Some operational functions continue to be under­staffed while their associated support func­tions continue to be significantly overstaffed.
  • OPG engaged a consultant to conduct a compensation benchmarking study in 2012, which found that base salary, cash compensa­tion and pension benefits for a significant proportion of staff were excessive compared to market data. The audit showed that total earnings were significantly higher at OPG than total earnings for comparable positions in the Ontario Public Service (OPS), and many of OPG’s senior executives earn more than most deputy ministers.
  • OPG’s total overtime costs were about $148 million in 2012. Although they have declined somewhat in recent years, the number of OPG employees earning more than $50,000 in overtime pay has doubled since 2003, from about 260 to 520 in 2012. The perception of many respondents to the survey was that poor planning and scheduling led to unnecessary overtime.

Selected Audit Recommendations

  • To ensure that staffing levels are reasonable and that it has the right people in the right positions to meet its business needs, OPG should:
    • evaluate and align the size of its executive and senior management group with its over­all staffing levels;
    • address the imbalances between overstaffed and understaffed areas in its nuclear oper­ations; and
    • review and monitor compliance with its recruitment and security clearance processes.
  • To ensure that employees receive appropriate and reasonable compensation in a fair and transparent manner, Ontario Power Generation should review salary levels and employee benefits, including pensions, to ensure that they are reasonable in comparison to other similar and broader-public-sector organizations and that they are paid out in accordance with policy, adequately justified and clearly documented.
  • To ensure that its non-regular and contract resources are used cost-efficiently, Ontario Power Generation should improve its succession planning, knowledge retention and knowledge transfer processes to minimize the need to rehire retired employees for extended periods;
  • To ensure that overtime hours and costs are minimized and monitored, Ontario Power Generation should decrease overtime costs for outages by plan­ning outages and arranging staff schedules in a more cost-beneficial way.