Continuing supply chain issues, rising vehicle costs and fluctuating fuel and electricity prices have driven organisations to change their company car policies, according to new research by Willis Towers Watson (WTW).
The consultant surveyed 1,641 UK organisations for its latest Company car and commuting policy trends report.
Almost half (47%) of UK organisations said they are revising makes and models of vehicles in company car policies, opting for BMW, Tesla and Audi vehicles due to supply chain disruptions impacting delivery times, spare parts accessibility and maintenance.
Following soaring costs, 30% plan to increase the company car benefit budget per employee. Meanwhile, some European employers are considering a cash allowance instead of a vehicle to increase flexibility, reduce administrative burden and risks linked to ownership and costs.
Additionally, increased regulations linked to sustainability and government initiatives to introduce alternatives to pollution-driving cars are pushing organisations to develop other commuting options. A third (33%) said they are introducing more environmentally-friendly vehicles, while 22% are introducing carbon dioxide emission ceilings on vehicles.
Organisations also said they are looking at how alternative commuting options can support employees’ mobility, while aligning with sustainability objectives. A fifth (20%) of UK employers said they provide free bicycle, scooter or motorbike parking, while 22% of European employers are exploring a public transport allowance.
Yifan Huang, rewards data intelligence lead at WTW, said: “While many employers are responding to external factors when reviewing their company car policies, their main objective is to align with market practices, competitiveness and sustainability. In unpredictable times, it is even more important to have access to reliable market data sources to have a clear understanding of shifts in market practices, so that policies are designed and delivered in a way that’s relevant to employees, sustainable and affordable.”
