Caught in a PR Storm – Crisis Management


– By Hanah Van Borek

On April 6, 2013, news broke out that RBC had replaced 45 of its own Canadian IT workers with temporary foreign employees from a company called iGate. These outsourced employees were in fact trained by the same employees that they would soon replace. Hours after the story was released, Canada’s largest financial institution was facing a storm of criticism from all corners, brands and types of media. The story, broken by CBC’s Kathy Tomlinson, received the largest recorded number of comments ever on their site. It was the most popular trending Canadian topic on Twitter. There was even a Facebook page dedicated to calling out the bank. Talk about a crisis management nightmare.

As not only a key financial player but also one of the biggest companies in Canada in terms of revenue, the spotlight is very hot for RBC. With its public image so heavily scrutinized, RBC’s PR strategy in handling the crisis went consequently as well.

The Response:

At first the bank was determined to explain the situation and clear up any bad air. RBC claimed that it had not outsourced to replace its existing employees, putting the blame on its suppliers who were working to compliment the company’s operations. RBC pointed to the government’s Temporary Foreign Worker Program as the route of the cause, and pointed to countless other companies who are engaged in the same hiring strategy. The bank also ensured that it was working to help those affected by the situation in their transition.

The Apology:

Days later the company issued an apology statement that was featured in full-page ads in the Globe and Mail and National Post. Titled, “An Open Letter to Canadians”, the piece explained that IT employees who were terminated would receive other positions within the company. The bank also announced a new youth employment initiative aimed at helping young people get their first work experience through the bank.

What can we learn from RBC?

Problems like this happen. That’s why crisis management exists. But the best defence is a good offence. Keeping on top of public opinion is key. Smart companies who use outsourcing will look at the public outcry and prepare their own messaging around their policies; they may even look into adjusting their policies if they see fit. What should also be taken away is the fact that, if it hasn’t already sunk in, social media is a force to be reckoned with. It’s another space to examine public opinion and it can be done in real time, just as the RBC crisis spread rapidly in real time. Getting the apology right is also very important. When “sorry” needs to be said, it needs to be done with both humility and dignity. While some argued that RBC was late in delivering, it was no doubt a well-orchestrated apology, ensuring the public that the company was owning up to its mistakes.

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