Recent research underscores a significant gap in UK workplaces regarding Salary Sacrifice car schemes.
- Only 32% of businesses offer these schemes, while 48% of employees desire them.
- Salary Sacrifice schemes provide financial benefits and encourage sustainable practices.
- Sustainability is increasingly crucial for new talent, especially Gen Z and Millennials.
- Employers can leverage these schemes for talent attraction and retention amidst growing sustainability demands.
Recent research from Volkswagen Financial Services (VWFS) Fleet highlights a growing demand among employees for Salary Sacrifice car schemes, which are not being fully met by employers. Just one-third of UK businesses currently offer such schemes, whereas nearly half of the workforce wishes for this benefit. “A Salary Sacrifice car scheme – where an employee ‘sacrifices’ part of their gross salary for a new vehicle – is a highly valued financial benefit for prospective and existing workers,” highlights Dan Wright, Product Manager at VWFS Fleet, emphasizing the scheme’s affordability and comprehensive coverage without hidden costs.
Among the benefits of Salary Sacrifice schemes are their potential to drive talent attraction and retention while promoting business sustainability. With ambitious climate targets ahead, businesses face a significant risk if they fail to align with employee demands for sustainability. According to VWFS Fleet’s findings, an overwhelming 79% of employees expect their employers to be proactively sustainable, with the younger generations, particularly Gen Z and Millennials, steering this demand. Notably, Deloitte’s research supports this view, indicating that over half of these younger workers consider a company’s environmental impact before job acceptance, and many even switch jobs due to environmental concerns.
VWFS Fleet’s survey sheds light on specific sustainability priorities that resonate with employees, with Salary Sacrifice schemes emerging as a preferred eco-friendly workplace benefit. Furthermore, 75% of employees express the desire to reduce commuting emissions, recognizing the role these schemes play in making electric vehicles (EVs) affordable. The schemes are supported by favorable tax incentives, such as a Benefit-in-Kind (BiK) rate of just 2% for EVs, in effect until April 2025, which is expected to remain significantly lower than rates for traditional vehicles.
In the context of ongoing challenges in talent recruitment and retention, VWFS Fleet’s research points to a vital opportunity for employers and HR managers. By enhancing employee benefit packages with Salary Sacrifice schemes, organizations can attract and retain top talent, aligning minimal employer costs with significant impacts on sustainability and competitive advantage in the job market, according to Dan Wright.
Employers and HR managers stand at a crucial juncture, where addressing the gap in demand and provision of eco-friendly benefits like Salary Sacrifice car schemes could substantially impact their strategies for talent management and sustainability targets.
In conclusion, the demand for Salary Sacrifice car schemes presents both a challenge and an opportunity for UK employers to meet sustainability goals and attract talent.
