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GEE, THANKS?

The UK’s biggest bank will give its employees one-time bonuses to offset inflation

A man walks out of Lloyd's of London's headquarters in the City of London
Reuters/Simon Dawson
The bank recently beat analysts’ expectations.
  • Lila MacLellan
By Lila MacLellan

Quartz at Work senior reporter

Published

Lloyds, the biggest bank in the UK, announced this week that it would give employees a one-time bonus of £1,000 (US$1,200) to offset the rising cost of living.

The vast majority of the bank’s employees—some 64,000 workers—will be eligible for the bonus, but senior managers and executives would be excluded, Reuters reported. “The move highlights the pressures on employers to help mitigate the impact of price rises on staff,” the news outlet wrote.

The decision is also a sign of momentum in employee activism. Unite, a major trade union, had been pushing Lloyds to improve employee pay, even sending bank workers to rally outside the company’s general meeting in May.

“While Lloyds Banking Group are making obscene amounts of money year after year, we cannot accept a situation where their workers, the backbone of their business, are struggling financially,” one Unite officer said at the time.

Now, Unite sees the new plan for a one-time payout as a good start. “Staff will welcome the £1,000 bonus but there is still a long way to go to eradicate low pay in what is one of the economy’s most profitable sectors,” said Sharon Graham, Unite’s general secretary, said in a statement.

This victory, she said on Twitter, “is an important step in changing the bank’s pay structures.”

More companies should expect calls to increase worker pay

The US, UK, and Europe have recently been experiencing inflation at about the same rate—around 8%. In the UK, inflation is expect to rise to 10% by the end of the year.

For some employees, higher price tags have added insult to the injury of aggressive return-to-office plans, as people who have been working remotely for more than two years must now factor in the soaring price of gas, lunch, and childcare when making arrangements to go back to working in person. Companies are looking for creative ways to make the office worth the extra hassle and expense.

But for lower-paid workers, who often can’t work from home, inflation has been more than an annoyance. In the UK, hikes in the cost of rent, groceries, heating, and transportation have led some of Lloyds’s retail and call center workers into debt, while others have had to cut back on retirement plan payments, according to Unite.

For its part, Lloyds said in this week’s memo that it would keep economic conditions in mind when it sets up pay increases for the firm’s employees in 2023.

The bank’s reported profit before tax (£1.62 billion; US$2 billion) beat analyst expectations in the latest reported quarter, according to Bloomberg. Still, staff in its lowest paid working groups were offered pay increases of less than 4% in 2022, which didn’t come close to matching inflation.

Unite is also planning what it’s calling “the first major demonstration by the trade union movement in many years” on June 16, when it’s asking members to march to London’s Parliament Square.

Also in its favor: A tight UK job market with more job openings that job seekers for the first time on record, the BBC writes. Other companies, including major grocery store chains, are bumping up pay to recruit and keep workers.

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