Fleet News

Insight: Salary sacrifice – why it's time for a closer look

Fleet manager Phil Redman says IBM is pleased with its progress. “We realise that for many employees, making a decision on something as important as a car can take some time to evolve.

“It can take a long time to digest all the information about how you calculate the benefits. And we expect the popularity of this scheme to increase as time progresses.”

IBM is matching the national take-up average of between 3% and 5% a year in the first few years.

“One of the most successful ways that we’ve raised awareness is with the clinics and roadshows held with the leasing company and members of my team,” says Redman.

“Talking to colleagues directly has proved to be a very effective way of communicating with them about the tax benefits and the fixed cost of motoring.

“These are in addition to some ‘ride-and-drive’ events, when employees had the opportunity to test the cars, which were well received.

“We also held some open-dealer days when colleagues could go along to visit car dealers, but these didn’t prove so popular.

“It’s all about keeping the scheme on colleagues’ radar so that they know that it’s open to them if they want it.”
Electronics company Philips was another early adopter when it launched its salary sacrifice scheme in conjunction with Zenith in June 2011.

Nicolas Bedard, procurement manager UKI for Philips, attributes its take-up,  now encompassing around 5% of its total workforce, to the wide variety of cars available.

“Philips has 2,000 employees in the UK and, of these, 700 have registered on the Zenith quoting website,” says Bedard.

“Since the scheme was launched more than 100 vehicles have been ordered. It offers flexibility in the vehicles offered, meaning that there is a car to suit every lifestyle.

“We’ve noticed that there isn’t a particular type of employee that goes for salary sacrifice.

“They are from all different levels of seniority and based all over the UK working either at our headquarters, manufacturing sites or out in the field.”

Bedard adds that his colleagues are increasingly drawn to the scheme once they realise that “all car-related expenses are bundled into one monthly payment”.

It’s important to make eligible employees fully aware of this through promotional material and roadshows.

Most employers have introduced salary sacrifice to sit alongside their traditional company car scheme and this is seen as providers as offering the best opportunity.

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