According to a survey conducted by fleet management firm, Lloyds TSB Autolease, over half the company directors in the South West are prepared to put an end to all forms of employee benefits as they seek to cut costs.
With cost cutting still high on the boardroom agenda, 51% of financial decision makers in the South West polled by Autolease would not include any form of employee reward, including company cars, if they could start their staff benefits scheme afresh.
Claudia Rose, Corporate Sales Director at Lloyds TSB Autolease, says:
“Businesses are looking at ways to further reduce their cost base, but there is a limit to how far cutbacks can be made before it proves counter-productive.
“It pays to remember that a properly rewarded and motivated workforce is essential for any business looking to manage its way out of a slump. Coupled with this, the perceived value of a company car is often higher than the hard cash value, so it remains a great option for business and staff alike.”
Autolease’s survey shows that directors in the South West recognise the value of company cars with only 6% of directors surveyed stating that they would opt to cut the benefit.
But other reward-based perks are coming under threat with 18% of South West bosses admitting they would put a stop to bonuses.
“Cost reduction can be less painful in some areas than others, but employee benefits are notoriously difficult to tackle, particularly if wholesale changes are planned. In most cases it’s much easier to satisfy the needs of all stakeholders by taking sensible steps to reduce the cost burden, rather than withdrawing benefit schemes altogether.
“In today’s climate it’s much easier to switch company car drivers to more fuel and C02 efficient cars and reap the rewards in terms of lower running costs as well as reduced personal and business tax”, says Claudia Rose.
Lloyds TSB Autolease also calls for financial decision makers to engage with HR departments and staff from the outset to ensure there is adequate consultation before making wholesale changes to benefit policies.
“A thorough cost-benefit analysis of most firms’ current schemes would show that company cars rank highly against other benefits, as both a business asset and a staff reward.
“So while a regular review of fleet policy to take account of changes in legislation, taxation and operational capacity is a positive step, a complete withdrawal of the benefit would be a short term cost saving measure that could ultimately prove detrimental”, warns Claudia Rose.