Company cars remain a popular employee benefit, according to new research by XpertHR

Company cars remain a popular employee benefit, according to new research by XpertHR

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Car allowances are offered at an overwhelming 85.1% of organisations, but they are given to only 6.1% of employees

XpertHR’s 2017 company cars and car allowance survey published has found that 71.3% of organisations have company cars, although they are usually only offered to a minority of employees – just 8.2% are given this option.

The research revealed that over the past two years there has been no change in the number of employees entitled to a company car at close to half (45.4%) of organisations.

However, there is a split between the number of organisations that have increased or decreased the number of employees entitled to a company car, at 28.2% and 20.4% of organisations respectively.

The headline reasons for the increase were an increase in headcount (52.5%) and company/business growth (28.2%); whilst the main reasons for the fall were the removal of this benefit (34.1%), the cost of running the fleet (22.7%) and tax changes (20.5%).

Whilst at a fifth of organisations entitlement to a company car has fallen over the past two years, this trend is not mirrored when it comes to car allowances. The number of staff eligible for a car allowance has fallen at just 7.8% of organisations, while it has stayed the same at 44.2% and increased at 38.8%.

Reasons given by organisations for the increase in car allowance eligibility include offering employees more flexibility and choice; increased headcount; reducing or ending company car schemes; and/or moving from company cars to car allowances for better tax efficiency.

So, who is likely to receive a company car?

Employees at director level are far more likely to receive company cars or a car allowance for ‘status’ reasons rather than job need, whereas the opposite is true for other staff.

Choice of car is also dependent on seniority. More than two-thirds (69.7%) of directors are given a free choice of car within a specified value band, while for most managers and staff the choice is limited to a defined range of models (at 58.6% and 65.6% of organisations respectively).

Directors could typically be driving a 5 series BMW, managers an Audi A3 or other staff a Toyota Prius, with the median typical list price of an organisation’s company cars for each job level at £40,000, £30,000 and £25,000 respectively.

Several factors determine which cars organisations offer employees, with the top considerations being vehicle lease costs (50.5%), size of the vehicle/fit for purpose (36.6%) and the vehicle emissions (33.3%).

And when organisations assess whether a company car is essential for an individual, nearly three-quarters (73.4%) consider the type of job role. Unsurprisingly, a high number of organisations say a car is essential for employees in a sales role.

Other employees in receipt of a company car include technical/servicing/engineer roles; maintenance/facilities/property roles; and client-facing roles. Most organisations also specify that cars are given at director, senior management and/or manager level.

Source: recruitingtimes.org