As an employer, there are a lot of decisions that you have to make on a regular basis, and many of those concern your employees and the sorts of benefits you will offer. Company cars are a common—albeit declining—benefit offered by businesses for their employees. One in four companies offer cars for employees, so it’s still something that is worth seriously considering if you’re the person in charge.
How do you decide if this particular benefit is right for your company? How do you implement a company car policy, and what are some things that you need to consider?
Weigh Up The Implications
Offering company cars, even for a few employees, is a big expense, so before you make the decision there are a lot of things to think about. Being able to attract and retain the very best in the business as employees is one of the biggest benefits of company cars, so it might be worth the expense regardless. But you also have to consider how many, and which, job positions should qualify for a company vehicle, what kinds of restrictions there should be, how often you will replace them.
Consider Other Options
Making this decision means realizing that there are also other options for your company. For example, you could save money by simply giving a monthly stipend or fuel allowance, or offer public transport passes. This makes more sense if you have employees who are merely commuting and not using their cars as a part of their daily work.
Covering Your Company
Insurance is also a factor. You will likely be responsible for insuring the vehicles as well, and you will have a lot of decisions to make regarding coverage. Who will be covered—just your employees? Their spouses? What exactly will be covered? And then you also have to decide who will be responsible for the maintenance of the car, repairs, and so on. Most employers tend to offer basic insurance for their employees, allowing them to add on extra coverage and pay for their own repairs and maintenance out of their own pocket.
Protecting the Vehicles
This raises another question of cost. If you provide company-funded vehicles, you would hope that they would last a long time, perhaps even longer than the employees themselves, and you could really get your money’s worth. However, you cannot guarantee the skill level of the people behind the wheel. What happens if you have an employee with an absolutely terrible driving record, who totals every car they have? There are certain things that you can do to try to counter this—requiring defensive driving courses, for example, or making it clear that employees will pay any damages for which they are at fault.
There are many benefits to offering company cars for your employees, for example certain tax benefits and the obvious plus of higher employee retention, but it is not a decision to be taken lightly. If you are a company that requires your employees to do a lot of driving, a company car is something that your competitors will likely offer, and as such will be necessary for proper growth and recruitment. But if most of your employees spend their workday at a desk, you might weigh up the pros and cons and find that it is not worth it after all. Each company has to make its own decision on the matter, and an open and frank discussion with employees might be a good idea. Ultimately though, the decision lies with you, and whatever one you make, it will surely be the right one for the company.
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Lindsey Patterson is a freelance writer and entrepreneur who specializes in business technology, customer relationship management, and lead management. She also writes about the latest social trends, specifically involving social media.