Salary schemes help keep staff loyal
Salary sacrifice car schemes are helping employers retain staff and attract new talent, according to a new industry guide.
The Complete HR Leader’s Guide to Salary Sacrifice Car Schemes, published by provider Tusker, draws on surveys of employers to show the broader benefits of these programs. While cost savings—particularly through reduced National Insurance contributions—often justify the schemes, their impact on workforce stability is becoming a key advantage.
Retention rates rise with electric vehicle access
At an event marking the guide’s release, author Nick Martindale explained that the retention benefits are clear. About 73% of Tusker drivers renew their electric vehicle (EV) arrangements, which typically last between 24 and 48 months. This indicates employees who take out electric cars tend to stay with a business for a significant amount of time.
“Employees are also more likely to be attracted to businesses that offer EV schemes, both because it provides access to electric cars that they would not otherwise be able to afford, and also because it demonstrates the employer’s commitment to wider sustainability goals,” Martindale said.
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The findings come from Tusker’s customer surveys and research conducted for HR Magazine. The research revealed that 48% of employers said a salary sacrifice scheme had helped them to attract and retain talent. The main motivation for companies implementing salary sacrifice car schemes is saving their staff money, while other benefits are said to include giving employees an affordable way to drive EVs, meeting employee demand, National Insurance savings and improving sustainability.
Overall, 34% of employers were found to currently have a salary sacrifice car scheme, with a further 19% considering introducing one in the next two years.
Some employers may be overspending
Martindale pointed out a surprising trend: more than half of employers still offer a company car scheme or cash allowance alongside a salary sacrifice scheme.
“There may be good reasons for this, particularly for those who have executives who have cars as perks, or perhaps for employees who use them during the course of their work. But the fact that 33% aren’t sure if those cash allowances are actually spent on salary sacrifice cars, and that 29% say that at best a few do this, is more surprising,” he said.
“It could mean that employers may not be getting value for money from their company car budgets.”
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The guide also offers some potential reassurance from employers who may fear complexities associated with introducing EV salary sacrifice schemes, with 71% of employers said to describe the process as ‘simple’.
However, Martindale added: “it’s vital that there is a tried and tested process for onboarding, and this process should be overseen by the provider.
“It’s essential to get everyone involved in the scheme from the employer side together, including those from HR, communications, payroll, to devise a launch plan, and ensure that everybody is involved at the right stage of the process.”
Sean has been a journalist reporting on the fleet industry since 2017. Since then, he has attended and reported on dozens of events held by organisations such as the SMMT, AFP, BVRLA, and National Highways, interviewed senior figures from car manufacturers, industry bodies and automotive suppliers, and reviewed hundreds of new cars and vans. His continuing goal is to explain the key issues of the fleet sector.
