· Features

Does the company car still have pulling power for staff?

Just over a year ago, Masterlease carried out research which demonstrated to employers that workers saw company cars as an important part of their benefits package. Nearly a third of those polled revealed that they would leave their job if they were offered a better company car elsewhere.

But one year down the line the economic downturn has deepened into a recession with businesses having to make drastic cuts to resources and their workforce. One area that is often identified as an easy place to cut costs is the company fleet, particularly as financial directors begin to take a more prominent role in procurement decisions. 

Last year's research showed HR managers in Britain were playing a major role in the fleet decisions, having almost as much influence over the fleet decisions as the financial director. This could have been perceived as not only linked to risk management, but during the good times this proved the importance of the company car as a benefit.

Today, more than ever, vehicle procurement has become a multi-role decision. Last year statistics showed the fleet director came in higher on the decision making hierarchy than the finance director who came in at 12%. The HR director or manager came in at 1%, ahead of his or her opposite number in procurement (9%), but evidence suggests, in the UK at least, HR departments were taking a role in fleet decisions because of the associated risk issues, not least the recent introduction of corporate manslaughter legislation, as well as the recognition that fleet was an area of recruitment and staff retention.

The changes over the past twelve months cannot be ignored however, and employees will be understanding or even supportive of fleet cuts as a cost saving exercise if this mitigates alternatives such as redundancy.

Nevertheless, the importance of the company car as a retention tool must not be underestimated. Whilst workers will understand economic decisions in the short term, fleet managers need to keep in mind the status value of the company car for many employees.

To put it simply, treatment of staff in the downturn will be remembered in the upturn, and unpopular decisions will not have bred loyalty among workers. Although financial directors may feel that they are making the right choices in the short-term, it is pertinent for businesses to think of the long-term effects that their cuts may have on their workers. On the way out of the recession, as soon as opportunities become available to employees, businesses are in danger of losing their best workers who are tempted by shiny new recruitment packages elsewhere.

Whilst businesses care about the bottom line in a recession, workers- while sitting tight in their jobs in the tough times- will ultimately want the best package that they can get, which might not be with their current employer.

Businesses will feel they are making the right decisions for the business, but they need to avoid knee-jerk reactions of money-saving in the short-term if this will cause long-term damage to the company. Short-term gain can result in long-term pain.

There are various alternatives to cutting fleets, such as solus deals and driver training. Reducing the choice of models in a fleet can save money for business, whilst also making economical decisions when it comes to vehicles, such as selecting sub 160g/ KM CO2 vehicles, fuel efficient models and even implementing driver education which can cut fuel and garage costs. These small changes all add up and can result in lower costs, lower emissions and more satisfied workers.

Often a careful combination of reduced vehicle choice, fuel efficient vehicles and driver re-education of fleet drivers, all specific to the individual companies, can bring cost savings comparable to making cuts in the fleet.

It is important for companies to remember the trend of workers leaving for better packages elsewhere is still true, and companies may find that as soon as the opportunity arises, those who have made rash financial decisions in the downturn will lose their best workers in the upturn.

Robert Kingdom is head of marketing and business development at Masterlease