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Rolls Royce, the iconic British engine manufacturer, is providing 14,000 employees with about $2,500 in cash to assist them in coping with rising living costs, with 11,000 also receiving a backdated wage increase.
On Monday, workers were informed that the company intended to pay 11,000 shop floor workers and 3,000 junior managers a cash sum of 2,000 dollars ($2,459).
As initially reported by Sky News, shop floor employees, who are represented by a union, will receive a 4% wage raise on top of the bonus, which will be retroactive to March of this year. A spokesman for Rolls-Royce later confirmed the information to Insider.
According to the firm, the bonus and wage increase adds up 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 continued impact of the global epidemic and, more lately, the crisis in Ukraine.”
“All of this has an effect on each of us at home, at work, and in our wallets,” he continued.
According to a Rolls Royce spokeswoman, this is the first time the firm has paid a cash payment based on the economy rather than performance.
Rolls-Royce has joined a growing number of companies that are promising to help workers as global inflation, exacerbated by the situation in Ukraine, drives up the cost of living, petrol, and food.
Inflation in the United States increased to 8.6% in the year ending May 2022, whereas inflation in the United Kingdom was 7.8% in the year ending April. The May data will be announced on Wednesday.
Pay has trailed behind price increases in both countries, rising 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 memo that a “simple wage increase” is not affordable in the current climate and would be irresponsible because it would harm the company’s “future competitiveness by adding too much cost into the long-term wage bill at times of such high uncertainty.”
Junior managers will get a wage raise in August, while shop floor workers will get theirs once a deal is reached with their union, Unite, according to the corporation.
Rolls Royce, which is not to be confused with the vehicle company of the same name, employs 20,000 people in the United Kingdom. Its revenue is mostly based on the production of aviation engines for companies like Boeing. As a result, the corporation had to lay off thousands of people as worldwide travel came to a halt due to the pandemic.