RBC Chief Issues Apology for Getting Caught Outsourcing Jobs

RBC CEO Gord Nixon’s Open Letter to Canadians

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

Let me tell you, we were really blindsided on this one. There was nothing newsworthy about our shedding of Canadian IT jobs through an outsourcing agreement with iGate Corp. If we can pay foreign workers less to do the same job that Canadians are doing, it’s our duty to our shareholders to make that happen. That’s why my own paycheque has recently seen a 25% increase to $12.6 million. All Canadian CEOs do it every day, and it is not news.

But with iGate, we went a bridge too far. And we got caught. For that, I apologize with all my heart.

Our supplier added insult to the outsourcing injury by using loopholes in the Canadian visa system our friends in the Harper government designed to allow us to employ foreign workers in Canada to do jobs at a lower wage than their Canadian counterparts. And iGate used our RBC IT employees to train the foreign workers who would be doing their jobs once those positions were offshored. When investigative journalists at the CBC found out about all this, the shit really hit the fan.

At first, we thought we could get out of this mess by blaming our supplier, iGate. After all, that’s why we have such arms-length arrangements. Contracting-out is supposed to enable us to avoid any responsibility for the business practices of our suppliers. But somehow the “iGate-gate” moniker never stuck to this scandal.

Now that RBC boycott movements have taken root, we see that there is no way to shift the blame here, so we must come clean and offer our sincerest apologies.

I want to apologize to the employees affected by this outsourcing arrangement as we should have been more sensitive and helpful to them. If we had been a little less ham-fisted in this particular case, we could have gotten a lot more public sympathy. All employees will be offered comparable job opportunities within the bank, which they will hold for as long as this scandal remains in the public consciousness.

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

How can high-paid CEOs make outsourcing of good jobs palatable to the Canadian public? How can the Harper government convince Canadians that the Temporary Foreign Workers program is designed for something other than providing corporations with cheap labour when it allows for foreign workers to be paid less than Canadians? And most importantly, how can we make sure that RBC never makes such a terrible mistake again – getting caught?

We are reviewing our supplier arrangements and policies with a continued focus on plausible deniability. To protect shareholder value, we need to ensure that we are sufficiently insulated from any possible scandals in the future.

Please accept our assurances that all our Canadian client call centres are located in Canada and support our domestic and our U.S. business, and they will remain in Canada. (Which does not preclude the possibility that some of our suppliers might have call centres overseas.)

To further improve our image, 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. We can always use a few low-paid interns to make photocopies and the good PR sure doesn’t hurt.

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. And, hopefully, the Canadians we employ will be fearful enough of losing their jobs to overseas suppliers (to whom we can transfer work at the drop of a hat) that they will accept wages that are more competitive with that cheap overseas labour.

RBC opened for business in 1864 and we have worked hard since then to earn the confidence and support of the community by keeping all of our less savoury business practices carefully hidden. Today, we remain every bit as committed to making our clients believe that we have earned the right to be their first choice, making them think that we provide rewarding careers for our employees, delivering returns to shareholders who invest with us (the rich folks we really care about), and creating the impression that we support 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

 

David Bernans is a Québec-based writer and translator. He is the author of Collateral Murder. Follow him on twitter @dbernans.

 

* Note: This letter is an English translation of Gord Nixon's original letter of apology, which was written in Corporate BS.