The value of a company car in a modern employee benefits package will be challenged at Fleet Live by a senior personnel director.
Charles Cotton, performance and reward adviser at the Chartered Institute of Personnel and Development, says there is a place for company cars within a flexible benefits package, but argues that businesses should not offer the keys to a company car simply because they have always done so.
The wage restraint which ushered in company cars during the 1970s no longer applies, and today the perk sits alongside health insurance, pension and even repaying university fees as a feature on a menu of benefits, says Cotton.
He says employers should consider why they provide benefits and look closely at how to get maximum value from their benefit spend, when assessing the appeal of a company car.
“Behavioural science has found that people find it easier to value tangible assets, like a company car, more than an intangible product like a pension,” he said.
“But a company car is going to be of value to employees depending on their individual circumstances.”
The opportunity, or lack of it, to drive a company car to work and park it can elevate or dilute the perceived value of the benefit.
Moreover, employers need to reflect the changing lifestyles of their employees over a number of years.
“For some people a company car may not be what they want, but next year it may be because their circumstances have changed, and that could happen throughout their careers,” said Cotton.
And, he added, both essential user and perk cars are still seen as key indicators of how an organisation values its staff, and consequently fleet decisions demand careful corporate consideration.
“How you reward and recognise people sends a message about what you think about that person,” he said.
- Charles Cotton will be speaking at Fleet Live on October 9