CEO points to lost productivity as reason for increasing in-office requirement to three to four days weekly
Royal Bank of Canada (RBC) is requiring employees to spend more time in the office, moving to a new hybrid model that will see staff working on-site three to four days per week starting in September.
According to a source speaking to Reuters, the announcement was met with frustration in company-wide internal chat groups, where staff raised concerns about the cost of commuting and additional travel time the new policy would require.
“RBC is a relationship-driven bank and in-person, human connection is core to our winning culture. We set the expectation in 2023 that we’d come together in the office for the majority of the time, with the flexibility to work remotely one to two days a week,” a spokesperson said in a statement.
The new requirement does not apply to employees whose roles are either fully remote or already require full-time in-office presence. However, the updated mandate marks a significant shift from previous flexible work policies and follows a broader trend among major financial institutions to bring staff back into physical office spaces.
US lender JPMorgan Chase, for example, announced in January that employees on hybrid schedules would be required to return to the office five days a week starting in March 2024, an even more aggressive return-to-office policy.
The return-to-office directive also reflects broader dynamics in Canada’s downtown business districts. While traffic has rebounded from pandemic-era lows, office occupancy levels remain subdued. In March, Canada’s national downtown office vacancy rate saw its first improvement since the COVID-19 pandemic began, falling slightly to 19.9% in Q1 from a record high of 20% in the previous quarter, according to CBRE Group Inc.
RBC, which has more than 94,000 full-time employees globally as of April 30, initially began increasing in-office requirements in spring 2023, when employees were asked to return at least three days a week. At the time, the bank said that less frequent in-person collaboration posed a risk to its “long-term competitiveness.”
CEO Dave McKay said that point on an earlier earnings call, stating that productivity and innovation had declined as staff continued to work from home most of the time.
RBC reported second-quarter earnings that missed analysts’ expectations, due to increased loan loss provisions aimed at preparing for a more uncertain economic outlook.
Read more: Blockbuster HSBC deal helps bolster RBC's Q2 performance
Over the past year, RBC has been integrating its acquisition of HSBC Bank Canada. In March, the bank implemented layoffs as it prepared to roll out a new strategic plan during its investor day later that month.
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