Royal Bank apologizes to outsourced workers

[jammies]

Luckily once all the office jobs for Canadians are outsourced to India, we can still reprioritize the economy around lumberjacks, rig pigs and convenience store clerks.

[Stay Golden]

RBC more like sorry they got caught.

[DuffMan]

I can't wait to talk to someone in a call center in India about a $2 service charge I shouldn't have gotten.

[V]

Originally Posted by Ducay

But its a business decision, as is anything RBC does. Its better for their shareholders to have worse customer service and save the money, than keeping CSRs all in Canada. Nothing more, nothing less. If it becomes better business to move it back to Canada, then they will. Capitalism at its finest, plus, who is going to complain about low-value call centre jobs going overseas besides the unions?

The problem is that RBC claims to be a socially responsible corporation in Canada, and sometimes that means you can't make decisions based on the almighty dollar.

My department had considered outsourcing our GIS work to India, but in the end it made sense as a socially responsible corporation to keep the jobs local. We spend more money, but we aren't going to get bad press over this decision.

[Devil's Rule]

RBC is behind the times. Offshoring large amounts of work, such as call centers, help desks and IT in general, is an effort that has peaked in the US in 2011 and is going through the initial stages of transformation. Many US manufacturing and now service companies are reshoring their work, bring it closer, http://www.reshorenow.org/why_reshore/ . What they have found out is that even though they can save on wages, the total cost of operating in this environment is not always financially beneficial, even though on the surface it might seem that way.

In the report it stated that the India employees would make about 20% of what the Canadian worker would make. Which makes great economic sense to send work that way. Now factor in offshored work productivity of 1.8 to 2.3 employees to cover one North American's work output, rework due to quality issues,extended infrastructure and fast rising wages, just to name a few items to consider, and you'll see that this model will not be sustainable for long. Another wage inflation article.

There is actually another threat to call center/help desk/ IT jobs, and that is technology, where it is going to be reducing many of the so called 1st level support jobs, both domestic and international.

So why does today's CEO outsource these positions now if they see the writing on the wall? I can't answer for sure, but my assumption is that they will do anything to lower operating costs while they are at the helm and get that nice big bonus. Sacrifice the future for now.

[Teh_Bandwagoner]

Originally Posted by jammies

Luckily once all the office jobs for Canadians are outsourced to India, we can still reprioritize the economy around lumberjacks, rig pigs and convenience store clerks.

I'm gonna go into the fur trade!

[DuffMan]

Sounds like something Mitt Romney would do.

[Rathji]

I see no problem outsourcing IT to India. Every week or so a fine Indian gentleman calls my house and helps me fix all the errors on my computer. He even installed a program on my computer that makes sure it is always working doing something that he called, bitcoin mining.

[Addick]

Originally Posted by Devil's Rule

In the report it stated that the India employees would make about 20% of what the Canadian worker would make. Which makes great economic sense to send work that way. Now factor in offshored work productivity of 1.8 to 2.3 employees to cover one North American's work output, rework due to quality issues

This is something I have to deal with on a daily basis and why I'm confident my current position would not be outsourced or would be in-sourced not long after it was outsourced. While some basic tasks can be easily outsourced, once things get complicated and require technical expertise outsourcing begins to cost a lot more.

[onetwo_threefour]

Originally Posted by Teh_Bandwagoner

I'm gonna go into the fur trade!

That'd be funnier if you were a girl...

[Erick Estrada]

I work for an American company that has outsourced a lot of parts manufacturing to China that we used to get done locally or in Canada and we have had major quality issues that have caused us to miss a lot of delivery dates that had penalty clauses. I just don't see the overall value as the bean counters think it's as simple as replacing this cost with a lesser cost but that's never the case.

[mrkajz44]

This is the part I never understand about a company laying off workers.

People jump jobs all the time from company to company. If a better offer comes along for someone, they will make the move to the better opportunity, which often results in them making more money. I'd say job loyalty is quite low these days.

However, if a company finds someone else that can job the same persons job at a lower cost, increasing profits, they are the scumbags of the earth. As if that employee they are replacing wouldn't leave if something else came along that was better for them.

Personally, I don't think it can work both ways.

[MarchHare]

Originally Posted by mrkajz44

This is the part I never understand about a company laying off workers.

People jump jobs all the time from company to company. If a better offer comes along for someone, they will make the move to the better opportunity, which often results in them making more money. I'd say job loyalty is quite low these days.

However, if a company finds someone else that can job the same persons job at a lower cost, increasing profits, they are the scumbags of the earth. As if that employee they are replacing wouldn't leave if something else came along that was better for them.

Personally, I don't think it can work both ways.

That's a chicken and egg problem. For members of older generations, such as my grandfather, it was common and expected that you would spend your entire career working for the same organization. The employer, in turn, invested in their people for 40+ years and even offered generous pension plans for retirees.

That all changed starting in the 1970s and 80s. That's when it became normal and accepted for even profitable companies to have massive rounds of layoffs and reduce/eliminate pensions. Probably not coincidentally, that's also when the term "human resources" came into prominent use.

So it's absolutely true to say that job loyalty isn't what it used to be. But what came first, the mercenary employees who jump from company to company every few years or the cutthroat employers who decided to prioritize eliminating positions, reducing benefits, and implementing other cost-cutting measures ahead of the long-term careers of their people?

[Devil's Rule]

Originally Posted by mrkajz44

This is the part I never understand about a company laying off workers.

People jump jobs all the time from company to company. If a better offer comes along for someone, they will make the move to the better opportunity, which often results in them making more money. I'd say job loyalty is quite low these days.

However, if a company finds someone else that can job the same persons job at a lower cost, increasing profits, they are the scumbags of the earth. As if that employee they are replacing wouldn't leave if something else came along that was better for them.

Personally, I don't think it can work both ways.

Might be somewhat related, but it's more complicated than that. In this case, you have RBC providing you a service that you pay for in CDN dollars, but they are able to source their resources from abroad which for now provides them a financial advantage.

What if as a consumer I source a cell provider from an offshore region to provide me with local service in Canada, that runs on the backbone of Rogers, Telus or Bell at a lower than operational cost to the big 3 telcos.

But again that is too simplistic of a scenario for this whole matter, and it touches on many more things that just wages and Canadian job loss.

This is happening in the US as well. http://www.bostonglobe.com/opinion/2...qeK/story.html

[Zulu29]

Originally Posted by Ducay

Don't really get this.... zero impact on customers, positive impact on shareholders. Its a solid move, but weak PR on RBCs part. They goofed it up and had to rehire the personnel. You shouldn't have to apologize for saving money, every large company in Canada does it. Part of business in the 21st century, its the ill-informed who think its an issue.

Why can't they just settle for their already giant profit margins? How much is enough for these CEO's? The greed is unreal.

[CaramonLS]

Originally Posted by MarchHare

That all changed starting in the 1970s and 80s. That's when it became normal and accepted for even profitable companies to have massive rounds of layoffs and reduce/eliminate pensions. Probably not coincidentally, that's also when the term "human resources" came into prominent use.

So it's absolutely true to say that job loyalty isn't what it used to be. But what came first, the mercenary employees who jump from company to company every few years or the cutthroat employers who decided to prioritize eliminating positions, reducing benefits, and implementing other cost-cutting measures ahead of the long-term careers of their people?

It's the latter. It started with Gen Xers watching their parents getting laid off and vowing that it wouldn't happen to them.

[Cowperson]

Originally Posted by Zulu29

Why can't they just settle for their already giant profit margins? How much is enough for these CEO's? The greed is unreal.

Dont confuse the dollar amount of profit with "giant profit margins."

Relative to the amount of capital in play, profits aren't gigantic.

Cowperson

[bluejays]

Originally Posted by Ducay

But its a business decision, as is anything RBC does. Its better for their shareholders to have worse customer service and save the money, than keeping CSRs all in Canada. Nothing more, nothing less. If it becomes better business to move it back to Canada, then they will. Capitalism at its finest, plus, who is going to complain about low-value call centre jobs going overseas besides the unions?

Fair enough, but no bank is unionized except CIBC.

[calculoso]

Originally Posted by Ducay

But its a business decision, as is anything RBC does. Its better for their shareholders to have worse customer service and save the money, than keeping CSRs all in Canada. Nothing more, nothing less.

That would be true, except they are delusional to think that they will receive the same or better Customer Service by having more staff. Nothing could be further from the truth.

who is going to complain about low-value call centre jobs going overseas besides the unions?

How about all of the Customers that have to talk to these people? Are you saying that the Customers truly do not matter?

[albertGQ]

Originally Posted by fleury

Fair enough, but no bank is unionized except CIBC.

ATBs front line staff are unionized.