Salary sacrifice car schemes – 4 key questions

FacebooktwitterpinterestlinkedinmailFacebooktwitterpinterestlinkedinmail

If you’re thinking about introducing a salary sacrifice car scheme, then asking the right questions of the right people will help ensure your fleet supplier is able to design and implement the best scheme for your company.

We’ve been in the fleet business for more than 50 years, working closely with organisations large and small across the private and public sectors.

We believe there are four key questions that you need to ask to make sure your scheme is cost-effective and straightforward to set up, as well as being attractive to your staff.

1. What are the motivations for setting up the scheme?

You will need to begin by developing a clear vision of what you hope to achieve. Whether you’re looking to or improve your environmental impact by switching your employees to newer, lower emission cars, improve employee wellbeing as part of a wider benefits strategy, to improve recruitment and retention, to save your business money  – or any combination of these goals – your chosen supplier should help to identify your priorities. They should then provide the expertise to design and build a scheme that best fits for your organisation.

2. How are you going to fund the scheme?

It’s the eternal question. Although the answer may be pre-determined by the financial objectives of the business, it’s important to remember that the employee experience is a key part of the service and its value. In order to have any chance of success, the list of company car benefits should show it to be a cost-effective alternative compared with what they could secure out in the retail world.

Any supplier that offers a great salary sacrifice product should see the value in not only negotiating attractive discounts, and mitigating risk for the employer, but also in ensuring that the employee’s end-to-end experience is a clear, simple and exciting one.

A detailed communications plan can make or break a scheme. If an employee can’t easily compare the price and service they’re being offered, they’re likely to stick with what they know, and the scheme uptake may suffer as a result.

3. How many employees are expected to use the scheme?

Although salary sacrifice has traditionally been most attractive to large companies with a lot of employees, smaller organisations are certainly not exempt from the benefits.

If you are a medium-sized company with fewer than 500 employees, it’s crucial when selecting your provider that both parties talk openly about the suitability of the scheme from the start. These conversations should cover a number of factors which need to be in place when dealing with a smaller population including: low staff turnover, mitigation of risk, an established benefits platform, and a high proportion of employees above the minimum wage.

If your provider has been through several life cycles of salary sacrifice vehicles, it will have experience of a wide range of real-world examples. This, along with a good study into whether a scheme is right for your business, will help you make a more informed decision, regardless of the size of your employee base.

4. How will you communicate the scheme to a geographically and demographically diverse employee base?

Never overlook the fact that buying or leasing a car is a significant life choice for an employee. Making that choice as clear and simple as possible is just as important as trying to secure the lowest price.

At the heart of it, a salary sacrifice scheme is an opportunity for a provider to influence and educate employees who may have never been exposed to company cars – or any other benefits-in-kind – before. All communications need to be clear, explaining issues that might already be obvious to a veteran company car driver.

Developing a concise, tailored communications plan from a single supplier will help to ensure the employees are educated, motivated and ready to make an informed decision on whether a salary sacrifice car is right for them.

Speak to our Salary Sacrifice experts today

We understand that introducing a salary sacrifice for car scheme is  big decision for any employer. In making that choice you will need to try to be very clear about what you are looking to achieve, and the message you want to give to your employee base.

Help from a provider throughout the process, from initial discussions through to design and build, benefits integration, risk mitigation, administration and communication throughout the life cycle of the vehicle is key.

Get in touch with our expert team today to find out about how to set up a well-designed salary sacrifice scheme. 

FacebooktwitterpinterestlinkedinmailFacebooktwitterpinterestlinkedinmail

Leave a Reply

Your email address will not be published. Required fields are marked *

Read more…