How to design a company car scheme to suit today’s workforces

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Need to know:

  • Hybrid and remote working have changed the need, and expectation, to drive to work five days a week for many employees.
  • Yet access to a company car, especially an electric vehicle through salary sacrifice, remains popular.
  • Company car schemes are still an important recruitment and retention tool, but need to be accompanied by proactive promotion and employee education.

Four years on from the Covid-19 pandemic, hybrid and remote working remain popular with many employees, with a survey published in May by communications agency Marco concluding that 44% actively prefer not having to commute into the office every day.

Although there are signs of a pushback by some employers, the reality is that, for many workers, the days of needing, or being expected, to drive to work five days a week, not to mention schlepping up and down the motorway to meetings, have long gone.

But where does this leave the company car scheme as a perk? For reward and employee benefits professionals thinking of introducing a car scheme, whether salary sacrifice electric vehicle-based (EV) or something more traditional, how has this new working landscape changed how they need to think about or design their scheme?

Valued benefit

The first thing to recognise is that, even if the daily commute is disappearing, it does not mean the lure of being able to access a company car is also on the wane, says Ali Argall, business development director at Tusker.

“As much as there is hybrid working now, the company car is still a cherished benefit within many organisations,” she says. “Even if someone is working hybrid, they still have to get into work two or three days a week. There may be weekend travel or the school run. There is also the excitement of driving an electric vehicle and moving into a greener form of travel.”

Oliver Boots, chief commercial officer at Octopus Electric Vehicles, adds: “We’re finding that, because of this [hybrid working], people are now more prepared to take jobs further away. So, when they are commuting into the office, it might be a longer drive or journey.”

A company car scheme is still a cost-efficient way for an employee to get access to a car, especially an electirc vehicle, that they may not otherwise be able to afford. “It plays a massive role in retention, certainly from the conversations we have with HR teams,” adds Boots, pointing to the Tesla Model Y and Model 3, MG4, Polestar 2, and ID.3 as being among its most popular models.

Iain Bennett, managing director at Gofor, says: “There is now definitely a bigger list of factors to consider if [employers] want to get [their] scheme right and ensure it is optimal. If [they] are looking to enhance [their] benefits package in order either to retain or attract staff for example, or actively looking to adopt an ESG agenda, or simply to optimise costs.

“What we’ve seen in the last six months to a year is there are a lot more affordable EVs coming to market. There are also more used EVs coming to market, which can be an attractive and more affordable option, especially for lower-earning employees.”

Essential benefit communication

As well as thinking how to frame and structure a scheme, ongoing education and promotion are key to ensuring take-up and interest do not wane, says Caroline Sandall-Mansergh, consultancy and channel development manager at Alphabet (GB).

“When launching a new benefit, there’s often a surge in interest before it falls away, so how [employers] communicate the launch of the scheme and keep it front of mind is paramount,” she explains. “Driver education is key to help them decide between different fuel and energy types, servicing costs and mileage capability to realise the total cost of ownership over, typically, three to four years.”

Leaning on the expertise of a provider in this context can be invaluable, adds Bennett. “We’ve seen high buy-in, for example, from when we’ve attended all-staff meetings and done live face-to-face presentations. Equally, we’ve done company intranet and Teams or Zoom presentations that have been effective. More and more now what we’re seeing is actual test-drive experiences can be valuable.”

Long-term planning

It is, of course, important to carry out extensive due diligence and checks on any potential supplier partners to ensure everything will run smoothly in the long term, says Andy Bruce, chief executive at Fleet Alliance. Do not overlook, too, putting in place protections such as early termination insurance should an employee wish to leave before the end of the lease period.

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“It is understanding the decision goal [an employer] is aiming for; net zero, for instance, might not be the absolute priority if it needs to be balanced with that inclusivity conversation,” says Tusker’s Argall in conclusion. Cheaper low or ultra-low emission cars rather than fully battery electric vehicles are perhaps an alternative option in this scenario.

“Ultimately, it is about ensuring everything is as flexible as possible, and reviewing things on a regular basis,” she adds.