How can company car schemes meet the needs of a varied workforce?

Company car schemes are an appealing facet of an organisation’s benefits programme, which can help an employer position itself – to prospective and current employees – as an attractive place to work.

Company car schemes

If you read nothing else, read this…

  • A vast range of cars are available through company car schemes to suit the various tastes, requirements and expectations of employees.
  • Offering staff the choice they desire can enhance take-up and engagement, with company cars as a benefit.
  • A scheme that appeals to all segments of the workforce can serve as a positive recruitment and retention tool.

Alastair Kendrick, director at McIntyre Hudson, explains that staff recruitment and retention is becoming an increasingly prevalent issue as the economy picks up and the job market improves.

Yet today’s workforce is far from monolithic, and there is no singular employee model that an organisation can build their benefits offering around. So how can company car schemes support an organisation in recruiting and retaining top talent while meeting the expectations and aspirations of a diverse workforce?

Adding value through choice

John Webb, principal consultant at Lex Autolease, says choice has a key role to play when it comes to providing a benefit that is valued by a diverse range of employees. “Once you start opening up choice [within the scheme], then it does have the power to appeal to the graduate just joining the organisation, to employees that have no families, to those that have younger families, and to those coming out the other end [of young family life] who might want to go back to a car that’s a little more sporty, for example,” he explains.

This flexibility, which can be advantageous for both employers and staff, extends to factors such as car type as well as funding and policy options. When introducing or revamping company cars as a benefit, employers must select the scheme that is most suited to them, taking into account issues such as the demographic of their workforce alongside cost considerations, mileage, purpose of travel and alignment with business goals.

Depending on the organisation, this can mean opting for a blended approach that incorporates more than one funding option. Webb explains that a blended solution involves looking at what is likely to be the best fit for a particular organisation. “Is it Eco [employee car ownership schemes], or contract, or salary sacrifice, or is it moving from one to the other?” he says.

John Pryor, chairman of the Association of Car Fleet Operators (ACFO), adds that a lack of employee engagement with company cars as a benefit is often the result of a disconnect between what an employee is offered and what they actually want. So increasing choice can have a positive impact on the value staff place on cars.

The range of cars that are available through today’s schemes can help employers to avoid this disconnect. Toby Poston, director of communications and external relations at the British Vehicle Rental and Leasing Association (BVRLA), says: “I think from the type of car point of view, and considering the variety of low-emission vehicles, there’s a car for everyone, whatever generation they are from, or what they are going to use it for.”

Appealing to the younger generation

Colin Tourick, Grant Thornton professor of automotive management at the University of Buckingham Business School, adds that the option of low-emission cars can be particularly appealing to younger members of staff, a generation often seen as having a greater focus on green issues.

It is also a generation known for its high level of technological interest and aptitude, which can have a wider implication for staff travel policies, such as mileage and expense systems. Paul Hollick, chairman of the Institute of Car Fleet Management (ICFM), explains: “Generation Y [employees] don’t want to go to a desktop and do their claims at the end of the month. They just want to be able to click ‘start’ and click ‘end’, upload [the information] and then not worry about it. That’s what everything is moving towards.”

But Tourick asks whether the increasing difficulty that young people now face when it comes to property ownership is shifting car ownership down their list of priorities, and whether this will have a knock-on effect oncompany car schemes down the line. However, this may also be seen as a geographical rather than generational issue. For example, while car ownership may not be a priority for some London-based staff, interest in company cars is rising outside of the capital.

ACFO’s Pryor says: “The cost of parking and running [a car is high] in London, and a number of people say, ‘It sits outside my door from Sunday night to Friday night because I’m using my Oyster card, but I need a [car] for the occasional trip at the weekend,’ for example.”

Being given the opportunity to use a car as and when it is needed, therefore, could be an attractive prospect for employees in central London, which could be structured as a separate, employee-paid and employer-supported benefit. For example, while a worker may use London’s public transport system for their daily commute, a car might be a more practical and convenient method of transport for the shopping run or a weekend trip.

Attitudes and expectations

There has also been a change in employee attitudes towards the type of car they drive. Tourick says: “Inspirationally, it used to be the case that [employees] wanted their next company car to be bigger and more powerful, but people don’t now. The change of mindset has been extraordinary. Now people are often thinking they want to go down [in car size].”

For Hollick, this ties into a general trend. “Culturally in the UK, it has become trendy to save money.”

People are also paying more attention to factors impacting everyday use, such as the size of parking bays, adds Pryor. “People are thinking about what they are doing with their lifestyle car,” he explains.

Responding to shifting attitudes and building choice into a scheme to meet the desires and requirements of a varied workforce can help an organisation to boost take-up, increase engagement and enhance its profile as a destination employer. However, it is vital that both employers and staff have a thorough understanding of the schemes and all they entail.

Lex Autolease’s Webb says: “One of the things the leasing industry is obliged to do is make sure that [employers] know absolutely every element of the impact [implementing a company car scheme has] on the organisation, how these need to be complied with and the potential risks in terms of regulations and tax compliance, so that they understand all those elements.

“This includes the employees making choices about the cars, [so that they know] what the impact is going to be for them. If [the leasing industry] doesn’t do that, then the [employer and employees] don’t take on the benefit. And, after all, it is designed to be a benefit.”

This need for comprehensive communications is also being recognised in revisions to its codes. As the BVRLA’s Poston says: “There is much more emphasis on transparency, and above all communications, so that even drivers are aware ahead of time about the end of contract process, what’s expected of them, and how it’s going to work.”