Treat cars as a strategic HR asset and you’ll motor

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Cars don’t just help employees do their job, they reinforce the psychological contract that is so important in achieving goals in both retention and productivity terms, says Richard Schooling, commercial director, Alphabet

Cars offer huge potential to HR departments seeking to support smarter, stronger organisations by delivering people who are skilled, creative, challenging, motivated, flexible and committed.

Offering an employee an attractive, high value item such as a car to ‘own’ for a period of years doesn’t just help them do their job, it also reinforces the psychological contract that is so important to retention and productivity in the post job-for-life workplace.

Arguably, employers risk giving away a winning hand when they encourage employees to opt out of cars, especially if their main reason for doing so is ‘because everyone else is doing it’. Having said that, the leasing industry’s long-time focus on discounts and the current profile of duty of care have not exactly served to accentuate the positive side of car benefits. Indeed, the industry’s willingness to sacrifice choice to achieve lower prices looks increasingly at odds with progressive HR trends aimed at future talent markets that place a high value on choice and self-expression.

Car benefits need to adapt to this new reality: and that in turn requires a different relationship between organisations, their scheme suppliers and – the ultimate customers of both sides – the employees.

Leading employers are already successfully targeting different car benefits at different sections of their entire workforce: adaptable car schemes within flexible benefits strategies. Some are working with car scheme suppliers who act as a centre of excellence for the entire delivery of car benefits. Indeed, the definition and scope of ‘car’ schemes is likely to become wider as providers introduce related services such as insurance and credit cards into their overall offer.

This approach fits with the concept of HR business partnering: with the HR area achieving its own strategic goals for the business by, in turn, partnering with a car scheme supplier to provide a range of mobility packages that employees couldn’t afford nearly so easily if they were outside the company.

Of course, benefits must earn their keep. There has to be a tangible advantage to ‘holistic’ car benefits strategy if it is to supplant more conventional solutions.

Although today the trend in car benefits is still undeniably running in favour of cash options, employers are starting to look seriously for better solutions as the deep risks inherent in the cash approach become clearer.

Experience shows that integrated car benefit schemes can deliver significant savings compared with the traditional, lowest-bid-wins style of funding, thanks to the increased scope they offer for advantageous financial structuring and purchasing leverage. If you also count the ‘hidden’ savings from reduced employee turnover; higher productivity and so on, the case for switching from treating cars as a commodity to viewing them as a strategic HR asset is even stronger.

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