Inflation is driving more than one in five (22%) of UK businesses to review their company car policy and remove eligibility for the benefit from certain job roles in the next 12 months.
WTW’s 2023 Company Car Benefits Survey Report, which surveyed more than 1,500 UK organisations, found that this could be in a bid to manage costs since inflation has driven up the median budget per person by up to 12%.
Of the organisations polled, 68% offer a car allowance or company car to staff – 3% less than in 2022 – while eligibility levels dropped by the same percentage to 70%.
The research further found environmental, social, and corporate governance objectives are a priority for businesses, with 43% of those planning to review their policies intending to implement more environmentally friendly policies and behaviours within the year.
Nearly two in five (37%) plan to bring in greener cars, while more than one in five (22%) intend to introduce CO2 emission ceilings on vehicles. More than two in five (41%) respondents want to change the make and model of their company’s vehicles. Additionally, 28% of organisations surveyed provide access to bicycles, while 22% have arranged car pooling among staff.
Lori Stokes, rewards data intelligence lead at WTW said: “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.”