RBC foreign workers controversy won't affect bottom line, PR experts say

Since CBC News released anexclusive report on Saturdayrevealing thatforeign workers were being brought in to replace Canadiansat the Royal Bank of Canada,the country'slargest bank has been dealing with a PR crisis.

• RBC replaces Canadian staff with foreign workers

For five days now the upper echelons of the bank have been rolling out their responsesto try to reverse the tide of negative public opinion. (The RBC story went viral and was one of the most-commented-upon stories ever on CBCNews.ca.)

Buthowever much this has damaged the banking giant's reputation, PR experts say there should be little financial repercussionboth in the short term andin the long run.

"Theyve done a good job getting their message out," says Barry Waite, a professor of corporate public relations at Centennial College in Toronto. But, he also adds that "no matter what they do, it's like screaming at a rock concert."

"They're kind of caught in a perfect storm. They've become the symbol of a bigger issue surrounding temporary foreign workers."

After the story broke, RBC's public relations staff swooped in to try and explain the situation in the face of the media flurry engulfing the bank.

A statement was released the next day on the bank's Facebook page as well as on Twitter, explaining the situation from the bank's point of view.

RBC president Gordon Nixon visited media outlets on Monday to say that, of the 21 employees used by California-based iGATE, the firm RBC has contractedIT services from, six are local, while 13 are from India but are only here to manage the transition.

• RBC denies use of foreign worker replacements

Only one, Nixon said, is a "temporary foreign worker" employed by iGate under the controversial immigration scheme set up by the federal government.

Nixon's intervention showed howseriously RBC was taking this controversy.

According to Barbara Jesson, president of Jesson + Company, a public relations firm in Toronto, corporations have a hierarchy of who speaks to the public on an issue, depending on the severity of the crisis.

By that point, however, the story had already hit the viral point and seems to haveincensed many Canadians who expressed their anger and outrage in asocial media maelstrom.

The company's responsewas being drowned out by the backlash on social media sites, which seemed to be rocketing around the world.

'Theyve become the symbol of a bigger issue surrounding temporary foreign workers.' Barry Waite, professor of public relations at Centennial College

For big media storms like this,corporationsusually have plans and strategies in place to get their message out, says Waite, particularly through their own customer service personnel andespecially when it comes to sensitive issues such as outsourcing and downsizing.

But "the truth is," he says, "you can't prepare for every eventuality."

To quell a public relations storm, companies usually send out a letter of explanation immediately. They outline the situation from the company's perspective, publish it via social media and attempt to drive customers back to their website for more information; then theysend a spokesperson out into the public eye.

In the face of public anger, corporations must also show a certain amount of empathy, andWaite notes thatstudies suggest that the effects of an apology can placate an angry mob of critics.

"People understand that things screw upthat things go wrong. If you apologize and acknowledge the impact that it's having, it will go a long way," he says.

Trumped by emotion

This complex story has been trumped by emotion for many Canadians, with social media commenters and others promising to close accounts and move patronage to another bank.

According to Waite, this kind of outrage tends not toamount to much. The online word for this is "slacktivism," where action is promised, pages are "liked" and pictures are posted in protest, but real action rarely materializes.

"Anyone can like a Facebook page, but at the end of the day, are they going to go down to a rally? Are they going to write their member of Parliament? Probably not," says Waite.

In the case of RBC, he suggest the bank will likelymanage this crisis mainly on a one-on-one level using tellers and local managers to get the bank's message across.

As a few make good on their promise to close their accounts and withdraw their money, they will likelybe met with a representative pleading the bank's case and imploring them not to move their business elsewhere

Drop in a bucket

The few accounts closed will amount to a drop in a bucket, according to Waite, who suggests that, in the long run, the company's crisis plan coupled with the short-term memory of the onlineworld will serve to keep the bank in good standing and will leave little to no damage.

"They don't like to have their reputation besmirched. No one does,"adds Jesson. "But, I don't think it will hurt them. It's going to take an awful lot to hurt the bank."

"It won't hurt themover the long haul. The challenge is that banks are so big that it's going to take a lot to knock the wind out of their sails."

Outsourcing and the use of foreign workers is commonplace in large organizations such as banks, airlines and retail outlets, says Waite. Once the spotlight is shone on the operations of other financial organizations, the public will see that RBC is not unique to this.

"People's lives are so intertwined with the banks.I think the other broader issue here is that Canadians have always had a love-hate relationship with their bank," he says.

Foreign workers increase by 40%

According to economic immigration lawyer David Cohen, the influx of temporary foreign workers has increased by 40 per cent in the last four years.

There were over 300,000 temporary foreign workers in Canada in 2012, a category that encompasses 44 occupations includingveterinarians, machinists, secondary school teachers, licensed practical nurses and software engineers.

"This is, in our view, part of a strategy to place significant downward pressure on wages in Canada," said Mark Rowlinson, assistant to the Canadian director of the United Steelworkers.

Jesson notes that in the currenteconomic climate, whichhas includedbig job losses, companies ought to be thinkingthrough their policies on job-related issues and be more thoughtful of them.

"In this case, the banks are obviously making money on the backs of the Canadian taxpayers so there's an expectation that they'll be a good employer," she says.

The elements that make the RBC issue controversial is not necessarily the use of foreign workers, but alsothat the outgoing employees were training their replacements; and thata company such as RBC, which is not financially hobbled, was cuttingCanadian jobs.

"We can shout at the ocean that we don't want jobs transferring overseas, but that's going on in a lot of sectors," says Cohen. We may not like it, in fact we don't like it, but if we're going to be a part of the global village then that's the way things operate now."

"We need to accept that Canadian manufacturing jobs have gone overseas, and the likelihood is that a lot of these jobs are never coming back."