More than 14,000 staff at Rolls Royce will be given a £2,000 one-off payment to help with the rising cost of living in the UK.
The payment will be for junior management and shop floor staff, mainly based at its Derby and Bristol sites, said the engineering firm.
The lump sum will start to be rolled out to 3,000 staff in their August pay.
The remaining 11,000 unionised workers will receive the payment after their union approves the amount.
Earlier this month Lloyds Bank announced measures to help staff cope with rising costs, as energy bills continue to soar and UK inflation hits a 40-year high.
A Rolls Royce spokesperson said that 70% of its UK workforce will receive the payment, adding that the company is also “offering our shop floor staff the highest annual pay rise for at least a decade”.
There are ongoing discussions with unions about a pay settlement for 2022-2023, the spokesperson said, and the cost of living issue is to be a factor in those negotiations.
The spokesperson also told said that the 11,000 unionised members will also be offered a 4% increase in pay, back-dated to March.
Pay rates and measures to help UK staff have been increasing as businesses have been seeking to recruit and retain staff, after official figures showed that there were fewer unemployed people than job vacancies for the first time since records began.
Lloyds Bank staff were offered a £1,000 lump sum to help with rising costs, after Unite the Union demonstrated outside its annual general meeting last month.
Inflation – the rate at which prices rise – currently stands at 9%, and is expected to increase again later this year.
Rolls Royce was badly impacted by the global coronavirus pandemic, which hit demand for its aircraft engines as international air travel ground to a halt.
In 2020 it announced plans to cut its global workforce by 9,000 by the end of this year, with 3,000 of those jobs going in the UK. At the time it said it would take “several years” for the industry to recover from the pandemic.
In the first year of Covid, Rolls Royce made a loss of £4bn because of the collapse in air travel, however it returned to profit in 2021.
In the company’s latest trading update, chief executive Warren East said the company’s financial performance had improved in 2021 and it had made “significant progress on the path to recovery from the impact of Covid-19”.
“We are confident that we have positioned the business to achieve positive profit and cash this year, driven by the benefits of our cost reductions and increased engine flying hours in civil aerospace together with a strong performance in defence and power systems,” he added.
Staff shortages are also putting pressure on firms to raise wages.
Earlier this month, Morrisons said it would increase pay for its store workers as UK supermarkets battle for staff in the face of increasing competition in the sector.
Rival chains Tesco, Sainsbury’s and Asda have also announced pay rises for their workers this year.
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Rolls Royce to give staff £2,000 living cost bonus