Top tips for boosting take-up of car salary sacrifice schemes

Salary sacrifice car schemes looked set to be the fastest growing benefit offering via flexible benefits plans this year, according to the Employee Benefits/Towers Watson Flexible benefits research 2014, published in April last year, which found that 22% of respondents were planning to add the perk last year. So how can employers ensure boost staff engagement with the perk in order to maximise take-up levels? 

Salary sacrifice car schemes

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  • Employers should have clear objectives for their scheme. 
  • Scheme risks include the early termination of contracts.
  • Staff may be more engaged with a scheme that offers low CO2-emission cars .

Offer a wide range of cars 

They can start by offering employees a wide range of cars from which to choose, including low CO2 (carbon dioxide) models.

Staff who drive cars provided through a salary sacrifice arrangement can reduce their motoring carbon footprint by up to 42%, according to research by car salary sacrifice scheme provider Fleet Evolution in February 2014.

Naomi Barringer, head of HR at the Transport Research Laboratory, says: “As long as employees look after the car, they only need to add fuel and the scheme can be tax-efficient if a low-emission car is chosen.”

Communicate the benefits 

A comprehensive communications campaign is one of the most effective ways in which employers can boost scheme engagement, and staff seem receptive to receiving such information. 

A survey by car salary sacrifice scheme provider Zenith, published in July 2014, showed that 85% of staff who are eligible to take part in a salary sacrifice car scheme would be open to further communication about the perk. 

A positive, sustained and concise campaign delivered through roadshows, intranet sites, internal magazines, emails and flyers can succeed in engaging employees. 

For example, geographical information systems organisation Esri UK communicated the launch of its car salary sacrifice scheme through a workplace roadshow, where staff were invited to discuss the benefit with the scheme provider and Esri’s HR team. 

TRL’s Barringer says face-to-face presentations, with plenty of opportunity for staff to quiz the scheme provider and their employer, works well. “I also believe that, as staff take up the scheme and share their experiences with their colleagues, its popularity will increase,” she adds.

Communication campaigns should typically be launched a couple of months before a scheme is rolled out. 

Andrea Wagley Talreja, reward manager at fast food restaurant chain KFC, says: “Depending on what the [scheme] objective is, [an employer] may tailor [its] communications, audience and structure.”   

Value for money 

A robust communications campaign can also help to dispel any fears about a salary sacrifice car scheme, which often relate to its overall cost.  

For example, staff should be made aware that a scheme will enable them to buy a new car for below the retail price and make significant savings in income tax and national insurance contributions. 

Get the basics right

But employers must ensure they have the scheme basics right before thinking about employee engagement. This means having a clear objective for the scheme, and a robust system for keeping up to date with scheme administration.

Organisations must also be sure to identify the key risks associated with a car salary sacrifice scheme.

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Common risks include road traffic accidents, which could result in the death of an employee or a third party, and staff terminating their scheme membership early  because of redundancy, for example. 

But most importantly, employers must ensure the scheme aligns with the needs of their workforce, which they can determine by conducting staff surveys and focus groups to assess employee requirements.