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Rolls-Royce Surprises Employees With a Retro Raise and a One-Off Bonus

Rolls-Royce sent out a memo to employees telling them they will very soon receive a retroactive pay raise and a bonus. The company’s CEO Warren East explained this was the best they could come with since inflation is causing havoc everywhere. This time, the corporation didn’t think about cutting its workforce again. But there’s one more step needed before workers can get their money.
Rolls-Royce Holdings Manufacturing Plant 6 photos
Photo: Rolls-Royce on YouTube
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Rolls-Royce decided it was time to pull up its socks and agreed on rewarding the company’s employees. They announced that almost 14,000 workers out of the 20,000 people employed will receive a backdated to March 4% raise and a one-time-only bonus of £2,000 ($2,455).

A retroactive or backdated pay raise consists of a lump sum awarded for a particular period. Rolls-Royce’s Human Resources will establish the difference between what the employees are owed and the amount they received in the months that have passed since March 2022.

The CEO explained in a memo cited by Fortune.com that a simple 4% raise wouldn’t suffice, and it would also be “irresponsible.” That’s why they added the one-off bonus. Looking at what’s been happening lately with manufacturers across the globe, paying a unique bonus is a great way of keeping your staff at work while also avoiding increasing operating costs. British Airways, for example, paid new hires a £1,000 ($1,227) welcome bonus.

The Rolls-Royce executives must now convince the worker’s union to accept this offer. Otherwise, the parties must start negotiating.

CEO Warren East also underlined that going beyond a backdated 4% raise would affect the manufacturer’s chances of remaining competitive. Rolls-Royce expects its operating costs to go up by $55 million until the end of the year if the union agrees with the retro pay bump and the one-off bonus.

The company laid off over 9,000 workers two years ago and is now trying to keep its operations afloat. They had to decide how the salaries paid to its high-skilled workforce would increase, otherwise, the company might be forced to spend more money on hiring and training newcomers. At the end of the day, it’s a great business strategy and not just a gesture made of generosity and care.

Rolls-Royce Holdings is the world’s second-largest manufacturer of aircraft engines. It also designs and distributes different power systems for aviation and other relevant industries. Lately, they’ve also been involved in building small nuclear reactors that may become vital for producing clean, zero-emission electricity. The company must not be confused with Rolls-Royce Motor Cars, which is owned by BMW and builds high-end vehicles.
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About the author: Florin Amariei
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Car shows on TV and his father's Fiat Tempra may have been Florin's early influences, but nowadays he favors different things, like the power of an F-150 Raptor. He'll never be able to ignore the shape of a Ferrari though, especially a yellow one.
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