No universal relevance for salary sacrifice schemes, says ACFO
While the concept of salary sacrifice is in its relative infancy, vehicle financial experts believe that salary sacrifice schemes represent a sea-change in the fleet industry that is set to become a huge part of organisations' remuneration strategies in the future.
But, according to ACFO's voluntary and anonymous on-line survey interest levels are relatively low. Results included the facts that:
• 24.2% of respondents have never looked at the salary sacrifice option
• Only 36.6% are thinking about looking at salary sacrifice
• 21.7% have “no interest” in salary sacrifice schemes
• Just 17.1% are currently analysing the salary sacrifice option
Decision-makers responding to the survey operated fleets ranging in size from under 50 vehicles to more than 1,500. The largest single fleet-size band was the over-500 cars group (45.9% of the sample). The next largest group (34.4%) was the sub-100 cars group.
ACFO membership secretary and director Stewart Whyte said: 'We know that many ACFO members have seen merit in a salary sacrifice-type arrangement, as an extension to the range of employee benefits on offer. Some have also seen this as a complete alternative to the use of more traditional fleet operating methods. This range is a major feature of the depth of experience across ACFO and the diversity of demand forms across the membership.
‘As a result, most providers will, I'm sure, acknowledge that salary sacrifice schemes can be an excellent product under specific fleet operating circumstances but cannot be considered as having universal relevance.’
Mr Whyte added: ‘While financial experts and vehicle leasing companies are swift to promote the salary sacrifice concept it depends on income levels and staff turnover levels. Businesses that employ staff on low or minimum wages and/or have a high employee turnover rate should not entertain the concept.’For more of the latest industry news, click here.