Rolls-Royce, the legendary British engine manufacturer, is providing an additional $2,500 in cash to 14,000 employees to assist them cope with rising living costs, with 11,000 also receiving a backdated pay increase.
On Monday, employees were informed that the company expects to pay 11,000 shop floor employees and 3,000 junior managers a cash sum of $2,000 ($2,459).
As first reported by Sky News, shop floor employees, who are represented by a union, will receive a 4% wage raise in addition to the bonus, which will be retroactive to March of this year. Through a business spokeswoman, Rolls-Royce later verified the story to Insider.
According to the firm, the combined incentive and salary boost equates to a 9% pay raise for the 11,000 shop floor employees.
“We are living in extraordinary times,” CEO Warren East wrote in a memo published by the Financial Times, “with economic instability mostly driven by the ongoing impact of the global epidemic and, more lately, the crisis in Ukraine.”
“It affects each of us at home, at work, and in our wallets,” he added.
According to a Rolls-Royce spokeswoman, this is the first time the firm has awarded a cash payment based on economic conditions rather than performance.
Rolls-Royce has joined a growing list of companies that are pledging to help workers as global inflation, exacerbated by the Ukraine conflict, drives up the cost of living, petrol, and food.
Inflation in the United States increased to 8.6% in the year ending May 2022, while inflation in the United Kingdom grew to 7.8% in the year ending April. On Wednesday, May’s data will be announced.
Pay has trailed behind price increases in both countries, rising by 4.8 percent for US private-sector employees in the year to March 2022 and 8% for UK employees between February and April.
According to the Financial Times, East wrote in the email that a “simple wage hike” would be unaffordable in the current context and would be irresponsible since it would harm the company’s “future competitiveness by injecting too much cost into the long-term wage bill at such high uncertainty.”
Junior managers will get a wage raise in August, while shop floor workers will get theirs whenever a deal with their union, Unite, is reached, according to the corporation.
In the United Kingdom, Rolls-Royce employs 20,000 people, which is different from the vehicle company of the same name. Its revenue is derived mainly from manufacturing aviation engines for companies like Boeing. As a result, as worldwide travel came to a halt due to the epidemic, the corporation was forced to lay off thousands of employees.