Fleet News

Employee benefits: environmental motoring

HERE’S a dilemma for you. You want to attract and keep good employees and an excellent way of doing that is with various benefit and reward schemes – bonuses, gym memberships, that kind of thing.

But such schemes are often expensive to the firm.

Now more and more fleets are considering a new form of reward scheme that saves everyone money – incentivising economical driving.

The idea is simple. Drivers lighten up that leaden right foot and try and get the best fuel economy they can from their company vehicles. Those who do it well get a reward, whether financial or otherwise. Such a scheme can work in several ways.

Some firms try and persuade drivers to be as economical as possible, by putting them through driver training that explains how to get the most from a tank of fuel.

Others combine that with a more foolproof method – making sure drivers choose economical cars, either by restricting the list of available vehicles or by incentivising drivers to leave the gas guzzlers alone.

The main problem in simply hoping drivers pick an economical car is that emissions and fuel economy are rarely at the top of their priority lists, according to David Barnes, product development manager at LeasePlan UK.

He says: ‘When choosing a company car, the benefits of more eco-friendly driving are often outweighed in the mind of the driver by things like size, convenience and cost. ‘The main tool at the disposal of fleet managers when trying to change this situation is information. Making sure drivers are aware of the facts can be an incredibly powerful tool in persuading them to make greener choices.’

This means highlighting the extra tax costs of the more fuel-guzzling vehicles and showing how, with better fuel management, hard-earned money can be saved.

Barnes says it could lure even the most ardent of sceptics to the ‘green side’.

But perhaps a more reliable way of getting results, rather than appealing to drivers’ good nature, is by appealing to their wallets.

Barnes says: ‘For a more traditional carrot and stick approach, fleet managers can introduce systems of rewards or bonuses for greener drivers.

‘One scheme that has seen particular success involves linking the monthly cost of ownership (MCO) to fuel efficiency.

‘Put simply, those drivers who choose cars that get more than 40mpg could get a higher MCO entitlement than those who choose less efficient cars. This can achieve great results in getting employees into greener vehicles.’

In effect, this means drivers can choose better specified cars if they are prepared to take ones with greener engines.

Other fleet managers have gone down the route of enforcing a maximum level of CO2 emissions across their fleets. Drivers are only offered cars which measure up to a yardstick of, say, emissions of 200g/km. Barnes says: ‘It’s difficult to force drivers to make greener choices, but making them aware of the facts and offering incentives can bring the issue to the top of their personal agendas.’

Care must be taken though, warns Mark Collins, regional tax partner for Baker Tilly accountants.

He says: ‘You can offer a financial benefit by saying ‘I’m not going to charge you as much if you go for a more efficient car’ but it’s a dangerous road to go down because people don’t like being told what to do.

‘Paying people bonuses for good behaviour in terms of fuel usage is a great idea, but you can run into problems if the drivers change cars regularly.’

The notion of education, education, education, is endorsed by Philip Peace, head of sales and marketing at fleet management firm VELO. He says: ‘Like most of the key issues in running a fleet, effective fuel efficiency is more about the education and buy-in of company car drivers than short-term initiatives.’

Rewarding drivers for hitting fuel targets could prove counterproductive. Peace says: ‘While many incentive schemes can produce significant results in the short term, they can often reduce as the impact of the reward lessens over time.

‘Consistency of message to drivers is paramount to an incentive scheme’s continuing success – historically this message has been from a financial perspective, encouraging drivers to be efficient for the sake of the organisation’s profitability.

‘However, in light of British industry’s increasing corporate social responsibility focus, the message has been given further weight by the clear contribution road transport movements have had on increasing carbon emissions.

‘There is a clear connection between drivers with good fuel economy and drivers with a low accident rate. In short, economical drivers are safer drivers.’

Fuel saving tips

  • Narrow your car choice list to more economical vehicles and provide incentives by upping the car specification allowed for smaller and more fuel-efficient vehicles.

  • Offer drivers a bonus incentive for choosing an alternatively-fuelled vehicle.

  • If you are going to offer fuel usage incentives, do it through a fuel card scheme. These provide valuable data around usage and efficiency. You could set employees clear and measurable targets which, if met, will award them a bonus.

  • Provide your employees with training and information on economical driving.

  • Fuel efficiency should form a part of the employee’s appraisal.

  • Make sure senior management leads by example and supports the cause. It’s no good instigating new policies only for the directors to arrive in huge cars that belch fumes all over the car park.

  • Consider introducing driver behaviour monitoring technology.

  • Keep employees informed as to the overall performance of the company.
  • Leave a comment for your chance to win £20 of John Lewis vouchers.

    Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

    Login to comment

    Comments

    No comments have been made yet.

    Compare costs of your company cars

    Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

    What is your BIK car tax liability?

    The Fleet News car tax calculator lets you work out tax costs for both employer and employee