18th September 2016
Why do company cars remain the most desirable perk and are employees expecting too much?
In the ‘2015 Report on Company Motoring’ from Lex Autolease, a major fleet management and funding specialist, it was identified that company cars play a prominent role in talent recruitment and retention.
After crunching feedback from just shy of 250 fleet managers, over 1,000 employees and in excess of 300,000 vehicles, Lex reported that 64% of employees said that the provision of a company car was or would be an important factor in weighing up new job opportunities.
Almost half of the fleet car drivers who participated felt that the vehicles they drive are a sign of achievement, whilst 43% of fleet managers expressed the view that company cars are becoming increasingly important in the HR world.
Winding the clock forward almost twelve months and it’s clear that things haven’t changed much, with a survey fresh off the press from ŠKODA finding that almost two-thirds of employees would decide to remain in their current roles if a company car was offered. This percentage matches those who view a car as the most important element of their benefit package, over a mobile phone, regular training or even medical insurance.
It’s the men who feel more strongly about car provision, 68% prioritising a car, compared to 58% of women. Trak Global Group is home to Carrot Insurance, providing policies to young and newly-qualified drivers, so it was interesting to learn that 33% of ŠKODA’s respondents from the 17-24 age group said they’d be more likely to accept a role if a car was offered.
Perennial trends like this aren’t exactly surprising, though. For starters, the price of new cars has risen considerably in recent years, meaning that many employees, especially younger ones fresh out of uni or post-grad courses, simply can’t afford to finance a new car through cash, loans, credit cards or PCP.
Growing numbers of businesses have relocated to out-of-town locations, some of them poorly served by public transport, if at all, making a car the only convenient means for employees to get to work. Used cars, although much more financially attainable, can sometimes prove unreliable. This naturally puts some employees off, scared that they may end up with a ‘lemon’ that makes them late for the office on occasion, possibly even losing their jobs as a result.
Fuel prices, vehicle excise duty and servicing and repair costs also make owning and running a car somewhat daunting, particularly for employees of lower grades or those just starting out in their careers, with student loans, other debts, first-rung houses and even weddings to pay for.
Factors like these surely contribute to the consistently high proportion of employees who view company fleet cars as the most important perk or benefit when weighing up new roles, or as a key influencer in them staying in their current positions.
These sentiments can in many cases actually benefit the organisations they work for, though, fleet managers along with HR and OD&P teams realising that their duty of care extends to employees’ privately-owned ‘grey fleet’ vehicles, which can typically be older, less reliable and less environmentally friendly.
Organisations typically lease their staff’s vehicles through business contract hire, lowering their tax and VAT bills, which some finance directors see as advantageous. By embracing employees’ strong appetite to be provided with company cars, organisations will also keep their people safer thanks to the technology fitted to newer cars, and they will also reduce their carbon footprint through reduced CO2 emissions. Therefore, anyone perceiving young employees’ expectations regarding company cars as unfounded and overambitious would do well to re-evaluate and look at the positive flipside.
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