Royal Bank apologizes to employees over outsourcing move

Toronto, Ottawa — The Globe and Mail

Gordon Nixon, CEO of Royal Bank of Canada (Fred Lum/Fred Lum/The Globe and Mail)

Royal Bank of Canada chief executive officer Gordon Nixon has issued an open letter apologizing to employees for a controversy involving the bank’s use of outsourcing.

In a statement titled “An open letter to Canadians,” the bank’s CEO said the bank is in compliance with regulations involving temporary workers, but should have handled the situation better.

Story continues below ad

“I want to apologize to the employees affected by this outsourcing arrangement as we should have been more sensitive and helpful to them,” Mr. Nixon said in the letter.

“While we are compliant with the regulations, the debate has been about something else. The question for many people is not about doing only what the rules require – it’s about doing what employees, clients, shareholders and Canadians expect of RBC. And that’s something we take very much to heart.”

The statement comes after the bank faced accusations from an employee over the weekend that RBC was using temporary foreign workers to displace work being done by its own information technology staff. The controversy stems from RBC’s plans to outsource IT work done for its Dexia investor service to iGate Corp., a U.S.-based company that operates primarily in India.

The federal government is now investigating whether there are discrepancies in the paperwork iGate filed with the federal temporary workers program. In order to comply with the program, iGate must show that the work it needed done could not be filled by the local employee base.

About 45 RBC employees are affected in the outsourcing, and Mr. Nixon said in the open letter that “all will be offered comparable job opportunities within the bank.”

The bank also pledged to review its supplier arrangements and policies to ensure that companies such as iGate are compliant with regulations. RBC said it also has no plans to move any of its call centres in the U.S. or Canada offshore. The bank also expects to announce a “new initiative aimed at helping young people gain an important first work experience in our company,” the letter said.

“Despite our best efforts, we don’t always meet everyone’s expectations, and when we get it wrong you are quick to tell us. You have my assurance that I’m listening,” Mr. Nixon added.

Outsourcing is common among the banking community, particularly with regard to IT workers. All of Canada’s major banks have told The Globe and Mail they have used the temporary foreign worker program to add staff when needed, mostly in the IT field. Such staff are also used when divisions are shifted outside the banks and moved offshore.

Though RBC has acknowledged it is outsourcing the Dexia technology functions in order to cut costs, Mr. Nixon said RBC is a net provider of new jobs in Canada. The bank employs 57,000 people.

In addition to granting numerous media interviews, Mr. Nixon has been personally reaching out to some of his harshest critics.

Shortly after the Professional Institute of the Public Service of Canada – a federal union of public servants – issued a letter Wednesday calling on its 56,000 members and their families to stop banking with RBC, Mr. Nixon personally e-mailed the union president to request a conversation.

Union president Gary Corbett said that conversation took place Thursday afternoon and lasted about 20 minutes.

“It seems to me that the Royal Bank is stepping up to do the right thing,” Mr. Corbett told The Globe and Mail. The union president said he and his colleagues have not yet decided whether Mr. Nixon’s call and public letter are enough for the union to change its position. Mr. Corbett said he will likely “adjust” the union’s statement on RBC.

“It was a good conversation,” he said, adding that Mr. Nixon told him he felt RBC’s actions had been misrepresented.

------------------------------

Read the letter below

RBC Issues open letter to Canadians

TORONTO, April 11, 2013 - RBC today issued the following open letter to Canadians to appear in Friday’s national papers.

An Open Letter to Canadians

RBC has been in the news this week in a way no company ever wants to be.

The recent debate about an outsourcing arrangement for some technology services has raised important questions.

While we are compliant with the regulations, the debate has been about something else. The question for many people is not about doing only what the rules require - it’s about doing what employees, clients, shareholders and Canadians expect of RBC. And that’s something we take very much to heart.

Despite our best efforts, we don’t always meet everyone’s expectations, and when we get it wrong you are quick to tell us. You have my assurance that I’m listening and we are making the following commitments.

First, I want to apologize to the employees affected by this outsourcing arrangement as we should have been more sensitive and helpful to them. All will be offered comparable job opportunities within the bank.

Second, we are reviewing our supplier arrangements and policies with a continued focus on Canadian jobs and prosperity, balancing our desire to be both a successful business and a leading corporate citizen.

Third, our Canadian client call centres are located in Canada and support our domestic and our U.S. business, and they will remain in Canada.

Fourth, we are preparing a new initiative aimed at helping young people gain an important first work experience in our company, which we will announce in the weeks ahead.

RBC proudly employs over 57,000 people in Canada. Over the last four years, despite a challenging global economy, we added almost 3,000 full-time jobs in Canada. We also hire over 2,000 youth in Canada each year and we support thousands more jobs through the purchases we make from Canadian suppliers. As we continue to grow, so will the number of jobs for Canadians.

RBC opened for business in 1864 and we have worked hard since then to earn the confidence and support of the community. Today, we remain every bit as committed to earning the right to be our clients’ first choice, providing rewarding careers for our employees, delivering returns to shareholders who invest with us, and supporting the communities in which we are privileged to operate.

I’d like to close by thanking our employees, clients, shareholders and community partners for your input and continued support.

Sincerely,

Gord Nixon
President and Chief Executive Officer,
Royal Bank of Canada

Topics: