Global leader in scientific innovation - Case Study
Before Autopia
In early 2008, our client had a fleet of 53 company leased cars that were managed by a well known fleet manager. These cars were purely passenger vehicles, in other words, they were not fitted out with any specific options required for their drivers to conduct business on behalf of the company. All customer facing employees were provided with either a Commodore, a Falcon or an Aurion, as part of their remuneration package.
Our client had been under increasing pressure to implement a more contemporary approach to vehicle policy and overall remuneration that would deliver greater value to employees and the business. Critical to this would be the phasing out of company cars and the implementation of car allowances with the option of novated leasing.
Our client’s HR Manager went to market to find a provider that could deliver solutions to the following challenges:
Vehicle benefit inequality
Whilst our client conducted rigorous annual benchmarking of company car entitlements for well-defined job levels, there was a disparity in the actual benefit received by employees. This was due to the large variation in annual usage (kilometres travelled) and hence resultant costs, between employees with different territories and residential locations.
Lack of flexibility and choice in remuneration
As part of a remuneration package, few employees actually consider company cars as good value. Some people prefer to drive smaller cars that are cheaper to run, pocketing the reduction in vehicle costs, and others prefer to spend more on a car of their choosing. Company cars don’t cater to these differences in preference. Our client identified that it needed to improve its ability to attract and retain employees, and implementing a more flexible vehicle policy was a key part of this.
High cost & liability for business
Managing a company leased fleet, even if it is ‘outsourced’ to a fleet manager, is costly, risky and inflexible. When employees leave the business, the car liability remains with the employer. Also, because the employees don’t own the vehicles they are more careless with them. Company cars are generally treated poorly and are involved in more accidents, resulting in unnecessary additional costs to the business.
Our solution
Equality through car allowances
Autopia worked with the business to develop appropriate car allowances for the numerous job levels that would adequately substitute the company car. This resolved the issues created by the varying amount of annual kilometres travelled by employees.
Personal vehicle choice
With novated leasing, employees can lease virtually any kind of car they like. Autopia provide vehicle selection assistance as part of the process, and even help source the car at reduced costs.
Lower cost and liability
By phasing out company cars, and phasing in novated leasing, the business has been able to cap its direct vehicle costs. It has also reduced the indirect administration costs and eliminated the liability inherent with a company leased fleet, as when an employee leaves, their car (and the lease) goes with them.
Introducing the change
Although addressing all of these issues was important for our client, what was crucial was the way in which the new vehicle policy decisions were implemented.
Targeted communication
Removing company cars and implementing car allowances was a big change. Our client was prepared for a certain level of resistance, particularly from long service employees who had driven company cars for at least ten years in some occasions.
Autopia developed a targeted communication strategy that encompassed:
- Education sessions to clearly articulate the change in policy, the reasons for change, the benefits for employees, and the next steps
- Highly personalised, one-on-one consultations with employees as their company cars came up for expiry
- Tailored frequently asked questions (FAQs) were developed post-launch and distributed to employees via email and company intranet to address common questions
Highly personalised, one-on-one consultation
Our client was critically aware that a call centre-like approach to transitioning these employees would fail, and one of the key reasons for choosing Autopia, was our highly differentiated approach to service. Autopia was able to introduce employees to a dedicated Vehicle Benefits Specialist (VBS) who would remain their one point of contact for the entire lifecycle of the lease.
Each VBS took the time to compare the employee’s pre-car allowance package against the new package, and deliver thorough education to ensure the employees understood the changes and took full advantage.
Easy process
The process of obtaining a novated lease with Autopia is easy. For employees who have always had the company do everything vehicle-related for them, the simplicity of Autopia’s approach to novated leasing was perfect.
Results
Autopia launched the novated lease benefit to all 53 employees with company cars, as well as another 50 who already had car allowances, in Jan 2009.
As a result of Autopia’s approach, the expected ‘pushback’ from employees did not materialise. Our client was delighted.
68% of the employees whose company car leases have expired have salary packaged a car through Autopia's Driver AutoPackage program, and our client has reduced its company car fleet by 40 vehicles to date. Vehicles are still expiring until 2012.
Due to our client’s satisfaction with Autopia’s administrative processes and based on the positive feedback from employees, they have recently opened the novated lease benefit up to an additional 250 employees that have historically not been entitled to a company car or car allowance.