Need to know:
- The changes to salary sacrifice arrangements that impact car schemes offered on this basis may have changed some employees’ attitudes to cars, but promoting green cars is an option for employers.
- Employers can support the implementation of electric and hybrid cars by investing in charging points.
- Changing working practices, such as offering flexible working and working from home arrangements, may mean that employees are no longer commuting on a regular basis, which could potentially reduce the need for staff travel benefits.
In 2015, 3.7 million UK employees had daily commutes of two hours or longer, according to analysis by the Trades Union Congress (TUC), published in November 2016. This represented an increase of 31% over the previous five years.
With this in mind, staff travel benefits that support an employee’s journey to and from work can be a useful tool for staff retention, says Jack Curzon, head of scheme design at Thomsons Online Benefits. “Businesses [are] trying to establish a strategy that identifies the needs of the employee and how best to support them,” he explains. “If that need is supporting [the] commute to work, [the strategy] will then be trying to put in place benefits to cover each area of that commute to work.”
So what trends are influencing staff travel benefits?
Changing attitudes to company cars
The tax changes impacting salary sacrifice arrangements have changed the way in which some employees value company cars, says David Wreford, senior reward consultant at Mercer. “Tax changes have heavily influenced the employees’ attitude towards the value of [company cars],” he says. “It’s diminished in employees’ eyes.”
Faced with this change in some employees’ attitudes, organisations could be under pressure to produce an alternative benefit. This could be a voluntary car scheme, which would offer all employees competitive rates and low costs. “Set up something like a voluntary car scheme that will enable people to buy, hopefully a very environmentally friendly, car and it will save them money in doing so,” says Curzon.
Company car schemes are also focused on the green agenda as employers are taking an interest in air quality, fuel costs, and vehicle sustainability. This, along with the salary sacrifice exemptions for ultra-low emission vehicles (ULEVs), has led to increased interest in the inclusion of electric and hybrid cars in employers’ schemes, as well as investment in charging points at workplaces. David Bushnell, product manager mobility at Alphabet UK, says: “We’ve seen a massive increase in uptake of these vehicles and it’s not just because [there is] a lower benefit in kind; it’s because people are actually understanding the fuel savings, the ease of driving these vehicles, the increase in public infrastructure for charging and being able to charge [the cars] at home too. It is certainly encouraging people down these routes.”
Help with travel costs
Season ticket loans are still popular among employers, particularly those based in cities. The convenience and accessibility of these loans can be an effective way of attracting and retaining employees, says Curzon. “If [employers] can provide [staff] with that level of convenience in their life, it affects their day-to-day wellbeing or work-life balance, then it’s something that makes an employer preferable.”
A further alternative for city-centric employers with nearby public transport infrastructure is a general mobility allowance, instead of a cash allowance for a car, says Lauren Pamma, head of fleet consultancy at Lex Autolease. This would allow employees to spend their allowance on topping up their Oyster card, paying for bike hire and taxi journeys or a daily rental vehicle, for example. This could be delivered via a monthly cash amount in a similar fashion to season ticket loans, although a mobility allowance such as this would be subject to tax and national insurance (NI).
Influences of a changing workplace
Flexible-working arrangements, which enable employees to work from home or away from their organisation’s main sites, may also reduce an employee’s need to travel. This could have a knock-on effect on the necessity for staff travel benefits. “[The] move towards increased flexibility might mean there is less requirement to travel,” explains Wreford. “That will diminish the emphasis that employers have placed on these benefits.”
Other influences on staff travel include organisations physically relocating into more urbanised areas. In these instances, the easy accessibility of public transport links may mean many employees will not feel the need to own a personal car, says Bushnell. Some younger employees are also choosing not to learn to drive because they cannot afford the associated costs, he adds. This may mean that benefits such as staff buses to take employees to other sites or nearby train stations, could increase in popularity.
Supporting physical activity in commuting
Employers’ approaches to staff travel could also be aligned to an organisation’s health and wellbeing strategy, particularly if employers take a paternalistic view to be more proactive in the health of their workforce and environmental sustainability. For example, a steps challenge could encourage employees to walk more on their commute. “Instead of just providing the solution to X amount of people get the train, X amount of people drive, it’s starting to say these [options] could be better for [employees] or for the environment, so [things such as] car-pooling, cycling, walking, and incentivising people [with a] weekly step challenge,” says Curzon.
Bikes-for-work schemes can also encourage employees to keep fit on their commute. Employers can support this by providing changing and showering facilities, as well as safe storage for staff to keep their bikes. Running and cycling clubs are also an effective method for getting employees to rethink their journey to work with like-minded people, says Bushnell.
Trends in staff travel have shown a widening landscape as employers look to provide a broader range of schemes to suit employees’ commuting needs. As Pamma says: “It’s [about looking at things] things such as agile working, flexible [options] and encouraging journey sharing where possible. It is all about making sure [employers have] got something that is as flexible as the way in which [they] are allowing [their] employees to work.”