RBC CEO says employees should be in the office more often

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The chief executive of Canada’s largest bank is urging employees to return to the office more frequently, and is saying the bank must become more deliberate about on-site work.

In an internal memo to Royal Bank of Canada’s RY-T 89,000-plus employees on Tuesday afternoon, chief executive Dave McKay asked that they “come together more often in person to work and collaborate” as the fall season approaches.

Mr. McKay acknowledged that flexible and hybrid work models are “here to stay,” and that the role of the office in workers’ lives has changed as a result of the pandemic, but he suggested that face-to-face interaction is a business necessity.

“For hybrid to continue to work effectively, we need to get the balance right and be a bit more deliberate about when and how we organize on-site,” he said.

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This is the first time this year, according to RBC, that Mr. McKay has directly addressed employees about returning to the office.

In justifying more-frequent office attendance, Mr. McKay argued that technology can’t replicate the “energy, spontaneity, big ideas or true sense of belonging” that come from working together in person. He added that mentorship and skills development, critical parts of the bank’s culture, are challenging when done through video screens.

In a June interview with The Globe and Mail, RBC’s now-former chief human resources officer, Helena Gottschling, said the bank was serious about maintaining its flexible approach to returning to the office, and had largely left it to individual departments to decide how many days a week employees should make the commute. “I would have loved the flexibility of not coming into work daily,” she said at the time.

Mr. McKay’s memo did not specify a minimum number of days employees would have to work from offices, but RBC spokesperson Rafael Ruffolo said the bank is now asking most of its workers to do so two or three times a week by the end of September. When asked what percentage of RBC employees are currently coming into work at least once a week, he said the bank couldn’t share those details.

“For some regions and teams, these practices are already in place. For others, this approach will require adjustments,” Mr. Ruffolo said.

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Most of Canada’s largest white-collar employers, including the Big Five banks, mandated a partial return to offices for their staff starting in spring of 2022. But many workers have made permanent lifestyle changes that make daily commuting difficult, and employers have struggled to convince them to travel. Foot traffic in the downtown cores of most major Canadian cities – one measure of how many people are actually returning to the office – still remains vastly below prepandemic levels.

According to July data from real estate company Avison Young, there was an uptick in foot traffic in the downtown cores of six of Canada’s largest cities – including Toronto, Montreal and Vancouver – this summer compared with last summer. But the number of pedestrians was still 54.7 per cent below what it was in early March, 2020, before the pandemic hit.

The latest data from Statistics Canada show that last month there was a slight increase in the number of people who worked most of their hours from home, from 23.8 per cent in June to 24.2 per cent in July. The agency attributed the uptick to a rise in the number of COVID-19 cases.

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In 2016, by comparison, just 4 per cent of employees worked most of their hours from home. When the pandemic first hit in 2020, 30 per cent of employees worked mostly remotely.

Other large employers are also pushing for a fall return to in-person work. On Monday, according to media reports, the tech giant Apple told employees in the company’s California headquarters that they would have to return to the office three times a week starting in September. In May, Apple attempted to get employees back into the office three days a week, but scrapped the requirement after significant pushback from workers.

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