HR REWARD AND BENEFITS


Focus on fl eet


A company car is a popular benefi t, but what is the business case to offer it rather than a cash allowance? There are three prime reasons: budgeting of costs, management of risk and reduction of


“Clearly, you can just continue to spend, spend, spend on


benefits or wider reward,” he says. “But for clients who have achieved the highest employee engagement, they typically aren’t the highest payers or the ones who provide the highest fund for benefits. It is about creating something that fits with your strategy, is appropriate and works for the business.” Barry Hoffman, group HRD at IT services company,


Computacenter, is sceptical as to whether ROI calculations can really be applied effectively to benefits. Its benefits portfolio is skewed towards salary sacrifice, because, Hoffman believes, this gives a clearer picture of people’s appetite for one particular benefit over another. “You can’t attribute engagement or effort to one or other


benefit,” he says. “There are so many variables that it’s a fool’s errand. We do benchmark ourselves, but take the results with an enormous pinch of salt – if everyone else is doing X, but we don’t feel it is right for us, we won’t do it.” International hotel chain IHG aims to offer a competitive


combined pay and benefits package for hotel employees in the UK that is equal to or above the average pay for similar roles, for example, committing to becoming a London Living Wage employer. It takes part in a number of surveys to ensure rates of pay and benefits for roles are competitive within its sector. Benefits are reviewed regularly “to ensure they are competitive relative to local conditions”,


says David


Lawrence, IHG VP compensation and benefits for EMEA. For Mercer principal Eddie Hodgart, measuring ROI on


benefits is “the holy grail”. Suppliers and employers have struggled to quantify impact with accuracy. Hodgart believes it is often programme design that undermines effectiveness, rather than “a lack of perceived value of the benefits”. “With take-up rates, the big issue is that we never get to the


bottom of why it’s high or low,” says Hodgart. “If I don’t take up a benefit, is it because I don’t value it, or because I don’t understand it? It is important for employers to speak to employees on a more qualitative basis to find out why.” Chris Charman, director of the UK reward practice at


14 HR Supplement September 2012


CO2 emissions. “With the pressure on managing costs even greater, providing a company car is a better option to a cash-for-car allowance,” says Roddy Graham, commercial director, fl eet management fi rm, Leasedrive and chairman of the Institute of Car Fleet Management. “It may cost employers more to reimburse a grey fl eet driver, who will be more inclined to view business mileage reimbursement as a potential money-making exercise, itself counter-productive to CSR commitments. Paying grey fl eet drivers to use their own vehicles makes no fi nancial sense if they cover high mileages.” With duty of care high up on the board agenda, provision of a company car offers the peace of mind it is properly maintained, safe and roadworthy. Moreover, the clean technology incorporated


in new vehicles provides a signifi cant reduction in CO2 emissions. According to Graham, the average age of a privately-owned vehicle used on public sector business is 6.7 years old, compared to about 18 months for company cars. Car salary sacrifi ce is increasing in popularity, due to advantages


it offers at a time when employers are under pressure to keep salary costs in check. Salary sacrifi ce is perceived as a creative way to deliver added value by allowing employees to make “signifi cant cost savings versus retail” through tax savings, insurance and maintenance savings and from enhanced corporate discounts, says Ian Hughes, commercial director of fl eet fi rm Zenith.


aligned with your employees’ wants


and needs Daniel Kasmir/FNZ hrmagazine.co.uk


Employee benefits should always be


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