© Rolls-Royce plc 2008 Legal Information

At the end of 2007, Rolls-Royce employed 39,529 permanent staff in over 50 countries.

The long life cycle associated with the Group's products makes it imperative that we have a skilled workforce which is committed to delivering excellence to customers over the long term. To achieve this, we aim to create a working environment that attracts and retains the best people, enhances their flexibility, capability and motivation and encourages them to be involved, resulting in improving performance.

Upholding our values

During the year we launched the Rolls-Royce Global Code of Business Ethics, available on the Group's website. This sets out principles and guidelines concerning interaction with our stakeholders. The Code is available in 16 languages and its distribution is being supported by a Group-wide training programme which is being rolled out in 2008.

Engaging employees

In 2005, we formed a Global Council to improve consultation and employee engagement. This meets twice a year and involves over 40 employee representatives from around the world plus senior managers from each business and function. In 2007, full Council meetings were held in Indianapolis, US and Bristol, UK and included consultation on global policy implementation.

The year saw the launch of the Strategy Storyboard, an interactive Group-wide briefing on corporate strategy and performance, which was delivered via facilitated sessions to all employees worldwide.

The bi-annual Global Employee Engagement Survey, which will next be conducted in 2008, provides valuable feedback on which we act in consultation with employees and their representatives. Response to the survey results is handled locally by the Group's businesses through action planning and feedback sessions.

Rolls-Royce provides competitive pay and benefits in all its locations and actively encourages share ownership by offering ShareSave plans to all employees. Our employees currently commit around £105 million to these plans. In the UK, statutory arrangements enable employees to receive part of their annual bonus in shares and to make monthly share purchases from their salary.

Encouraging diversity

The Group is committed to developing a diverse workforce and equal opportunities for all, with a Global Diversity Steering Group that shapes diversity policies. One example of our approach focuses on encouraging more women and people from minority backgrounds to pursue engineering careers.

In Asia, we made good progress in attracting leadership talent through the Asian Future Leaders Programme, attracting several high calibre early to mid-career managers to Rolls-Royce. A number of senior managers were also recruited locally into key roles. Together they will form the nucleus of the Group's evolving regional senior management team.

The third Women's Leadership Forum was held in North America and the UK Women's Network was fully established.

Our policy is to provide, wherever possible, employment training and development opportunities for disabled people. We are committed to supporting employees who become disabled and to helping disabled employees make the best possible use of their skills and potential.

Learning and development

The Group reviewed its learning and development strategy in 2007, realigning its training provision to global business priorities with the help of new Governance Boards which are now accountable for training standards worldwide. This activity was strengthened with the selection of new supplier partners in the UK, North America and Asia to ensure consistency and the highest possible standards.

Expenditure on the education, training and professional development of employees during the year totalled around £30 million. Training schemes to support future competitiveness are developed continually. Our quality programmes, for example, were deployed globally to ensure consistent performance standards across the Group. During the year, we again increased our use of online learning, delivering over 50,000 hours of training to over 11,000 users.

During 2007, we recruited 166 graduates and 220 apprentices and technicians worldwide. An additional 642 undergraduate students were employed for short-term training programmes of two months to a year's duration. At the end of the year there were 323 graduates and 550 apprentices and technicians on formal training programmes worldwide. As a measure of our dedication to graduate training, we were ranked 24th overall in The Times newspaper's Top 100 Graduate Employers of 2007, coming 2nd in the Engineering sector.

We also continued to invest in customer training, an important factor in strengthening our competitive position, delivering over 21,500 person days of training in our dedicated facilities or at customers' own premises.

Health and wellbeing

The primary objective of the Group's occupational health strategy is to create a culture of prevention rather than cure. The strategy has four key areas of focus:

• screening and surveillance;
• rehabilitation;
• health promotion; and
• education.

Progress against our screening and surveillance targets will be reported in April 2008 on the Group's website at www.rolls-royce.com. A Health Risk assessment pilot programme to identify and work with people at risk was launched in 2007 among employees in operations functions in the UK and will run until mid 2008.

The importance of managing rehabilitation effectively was reinforced during the year with an ongoing training programme. New training modules were also launched to help managers assess their own understanding and delivery of occupational health principles.

A major health promotion campaign, 'Know Your Numbers', was held during the year, providing workstations where nearly 2,000 employees measured their vital health statistics such as blood pressure, weight and blood cholesterol. An 'owners handbook' health manual will be issued to all employees in 2008.

The Group continued to promote best practice in health education by hosting a major conference on common health problems. Leading experts spoke to an audience of employees about the importance of maintaining a healthy workforce.

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