Fleet News

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

“Over the past three years, we have encountered different needs from some of our employees who want to join the scheme and we’ve been able to adapt to them with Mycar.

“For example, we are just launching a two-year lease scheme for people coming up to retirement who don’t want to have a car in their last year because it would affect their pension in the NHS. There is no doubt that we have certainly met our original objectives.”

Overcoming the issues

The biggest challenge mentioned by fleet managers during the first few years of a salary sacrifice scheme’s launch is ensuring employee buy-in.

This method of accessing a car remains relatively new in this country and consequently a structured communications plan – as highlighted by Redman – is essential to ensure that the cost implications and benefits are clear.

Matt Dyer, commercial director at LeasePlan UK, says his organisation has discovered several ways to successfully achieve this.

“Hosting employee road shows, providing online multi-media demonstrations, and producing employer branded e-communications and awareness materials – all of these are essential to ensure employee buy-in,” explains Dyer.

“And when you get these right, it’s also the best way to increase employee take-up.”

David Hosking, chief executive of Tusker, which has more salary sacrifice customers than any other firm, said some leasing companies are approaching this process “creatively”.

He explains: “We always like to enter into a true partnership with our clients and this involves running roadshows and payslip marketing drops, among other initiatives, as well being a bit creative about this process.

“For example, we run a scheme with a county council in the north east and initially there was relatively slow take-up of the scheme.

“We asked whether it would be possible for us to provide their kitchen areas and canteens with 500 coffee mugs featuring the name of the salary sacrifice scheme and the statement: ‘Only a mug would get left on the shelf with this fantastic employee benefit available’.

“This has definitely proved successful in raising awareness and increasing take-up.”

Hosking adds there are three fundamental issues which dictate a scheme’s take-up in the early years: the demographics of that organisation, the willingness of it to market the scheme, and the salaries of employees.
And these all directly impact on ensuring that the take-up is between 3% to 5% – or even better.

“I would say that the overall take-up for our scheme is 6% to 12% over the first three years provided we’re allowed to manage the scheme properly,” says Hosking.

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