LONDON, June 1, 2023 – A fifth (22%) of UK organisations looking to review their company car policy in the next 12 months are planning to remove car benefit eligibility from selected roles and employee categories. This may be influenced by inflation that has driven the median budget per employee up by up to 12%, compared to the previous year. That’s according to WTW’s 2023 Company Car Benefits Survey Report.
Overall, 68% of companies in the UK offer either a company car or car allowance to employees, showing a slight decline of 3% since the previous year.
While eligibility levels for company car plans remained fairly stable across all employee categories this year, sales employees were most impacted, as those eligible dropped from 73% to 70% compared to 2022.
However, despite the current impacts of inflation, companies are putting their focus towards longer term ESG objectives. As, almost half of companies (43%) among those intending to review their policies, are planning to introduce more environmentally friendly policies and behaviours in the next 12 months.
Almost two-fifths of organisations (37%) plan to introduce more environmentally friendly vehicles which can be seen in a greater influx of electric vehicles into the market, while a fifth (22%) plan to introduce CO2 emission ceilings on cars. 41% of companies intend to change the make and model of vehicles on offer.
The objective to introduce more environmentally friendly policies and behaviours is also inspiring organisations to consider other alternatives to the traditional company car and car allowances. 28% of respondents are providing access to bicycles, while 22% of companies have organised car-pooling among employees.
Lori Stokes, Rewards Data Intelligence Lead at WTW says “Inflation has, at least in the short term, become a high-priority consideration for most organisations, which has called for the reassessment of benefit offerings across the board.
“As the cost of vehicles and leasing has grown considerably in a short space of time, it’s raising questions around how to best manage company car benefit plans, whether that’s through reviewing those eligible, the type of vehicle on offer or budget optimisation.
“When coupled with objectives to introduce more environmentally friendly policies and behaviour, many organisations are looking towards alternatives to achieve these goals.”
“Inflation has, at least in the short term, become a high-priority consideration for most organisations, which has called for the reassessment of benefit offerings across the board.”
Lori Stokes | Rewards Data Intelligence Lead at WTW
WTW surveyed 1524 UK organisations across a broad range of industries about their company car benefit policies and practices between April 2022 and January 2023 for its 2023 Company Car Benefits Survey Report.
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