Fleet News

Finance: Keep both finance and HR happy

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Guy Roberts, director of Novalease, SG Fleet, looks at battles between HR and finance when it comes to employee benefits.

It’s an age-old challenge for any fleet manager. Your HR director wants a better staff benefit with a wider choice of cars and more staff eligible for a company car. Your finance director wants lower costs and doesn’t want to be left with cars when people leave.

For many fleet managers, these conflicting goals have meant they can’t keep both HR and finance happy.

If a car policy is too open, HR is happy but finance quivers with fear. If a car policy is too tight, HR is unhappy and you could end up with a large, unmanageable grey fleet.

This problem is the result of using a single lease structure for all your company cars.

Company cars are normally funded through master contract hire structures. Because every lease obligation sits with the company, this makes it difficult to offer employees a wide choice of cars. For example, if you let an employee choose a pink car, when they leave it will probably be hard to convince another employee to take over that car. Finance won’t be happy!

At SG Fleet, when you wish to offer an employee a wide choice of cars, we use a novated lease – if the employee leaves, the car will go with that employee. However, when you are ordering a standard car from a restricted list, use a master hire agreement.

This is a really simple solution to a long-standing problem. You no longer need to make a compromise between finance and HR. This strategy will also let you achieve significant savings via larger manufacturer discounts.

By having a restricted set of standard choices, you can maximise your discounts, making finance even happier. It comes back to having the right structure for the right circumstance.

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