Fleet News

Finance and HR staff muscle in on fleet role

THE traditional job title of fleet manager is becoming less common as different departments take growing responsibility in the operation of company cars.

Finance and human resource executives are playing a much greater role in making fleet decisions, reflecting the huge financial cost and perceived benefits of a company car fleet.

A new survey, which contacted human resource and finance professionals involved in decision-making, identifies how fleets are managed and funded and aims to understand fleet influences and current issues.

Commissioned by leasing giant LeasePlan, the survey questioned finance and HR executives from 350 companies.

Respondents were asked how many vehicles/cars their company operated, with the results showing the average number of vehicles was 440 units and cars 379 units. They were also asked at what level of employees were offered a company car: Senior management/directors 95%; middle management/executives 89%; sales/account management staff 80%; other field/service staff (76%) and other staff 19%.

In terms of staffing levels, 21% of respondents employ more than 5,000 full-time staff, 44% have 1,000-4,999, 29% have 250-999, 5% have less than 250 and 1% gave no answer.

The average number of employees is 2,693 and, as expected, the survey says, the largest companies have the largest car fleets, with 52% of those with 500+ cars employing more than 5,000 people.

The study found no relationship between the size of company and whether its fleet is owned or leased.

In terms of the role played by finance or HR executives in the fleet decision-making process, the survey found that almost all respondents got involved in some aspect of the fleet process.

A total of 97% of respondents dealt with at least one aspect, with 75% dealing with individual driver queries, 71% deciding how a fleet was managed, 59% shortlisting potential suppliers and 57% actually negotiating with suppliers and being involved in the final selection process.

Other areas of involvement included insurance and accident management, tax-related issues and health and safety.

The study found that driver queries and day-to-day running of the fleet were the areas in which finance and HR executives had most recent involvement.

A total of 11% were involved in driver queries recently, 10% in day-to-day running, 8% in general policy, negotiating with suppliers and selecting models/cars and 6% each in fleet management and purchasing.

The most recent involvement in fleet for a small proportion was in areas such as benefits, dealing with suppliers and insurance or accident management. Respondents were also asked which other departments within the company were involved in fleet decision-making.

Although 30% failed to answer the question, of those who did 18% said fleet, 15% said their finance department gets involved and 11% said HR.

Only 1% said their head office was involved in the fleet decision-making process. Other findings in the survey included 65% of fleets having made routine reviews of their fleets, as opposed to 32% reviewing it due to specific issues.

Changes to internal policies were the most likely reasons to prompt a fleet management review, accounting for 22%.

Also cited were tax (14%), cost (13%), change to provision (13%), general review (10%), efficiency/service (9%) and health and safety (9%). Other reasons were given by 29% of those surveyed.

The topic of funding was covered in the report and it was found that more than three-quarters of fleets were leased, although 45% of the largest car fleets were owned. Employee car ownership schemes accounted for only 6% but were more popular with larger fleets, with one in 10 funding their fleet that way.

Overall, a total of 76% of fleets were leased and 37% owned by the company. The type of leasing varied among respondents, with contract hire the most favoured option at 83%, particularly among smaller fleets. Finance lease accounted for 11%. The survey also quizzed respondents whose companies own their fleet on how it was financed. It found cash purchase was the most popular method, particularly among fleets of between 100 and 199 cars.

However, although executives were aware of how their fleet was funded, 27% of HR and 22% of finance executives were unaware of why it was purchased and funded in this way.

Reasons given for the funding decision were cheaper/cost- effective (28%), cash flow (16%), tradition (12%), easier (12%) and other (32%). The majority of respondents (57%) also suggested that leasing was the way future fleet purchases would be made. Only 13% expected to purchase their fleet.

The survey also found that 45% of fleets expected the number of vehicles they operated to stay the same over the next three years. A total of 23% expected to increase, while 31% were expecting a decrease.

Business growth was the most common reason for an increase, cited by 79% of fleets expecting to grow their fleet size, with 57% using this method.

  • What do you think? Email fleetnews@emap.com

    Areas of fleet decision-making in which finance and HR executives are personally involved

    Main decisions in which finance and HR executives have been involved recently

    Departments involved in the fleet decision-making process

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