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Salary sacrifice schemes become big news in 2011

By / 11 years ago / Latest News / No Comments

According to the firm, growth in demand has been noticeable across all industries, helped by increased understanding of the  benefits of salary sacrifice from HR professionals and other decision-makers, and will rise further in coming years.

Ian Hughes, commercial director for Zenith Provecta, said: 'We expect to double the number of Salary Exchange cars on our fleet over the next few years, as more and more employers learn about the added value that a Salary Sacrifice for Cars scheme can bring to their business.'

He also said that a continued focus on cost-cutting is leading more fleets to explore salary sacrifice: 'While it appears that the darker days of the credit crunch are behind us, businesses are continuing to look closely at costs.  Employers are continuing to seek cost-cutting measures without impacting directly on employees through, for example, salary freezes or even cuts.

'Many employees have been finding that they have less disposable income due to rises in inflation, fuel and insurance costs, with salaries not necessarily rising to compensate. Salary Exchange offers employers a way to ensure that employees make substantial savings on a new car, at little or no cost to the employer.'

However, Hughes did have a few caveats about how salary schemes are operated to ensure that fleets are not impacted by their implementation.

'Job security and confidence may be stabilising, but redundancies are an ongoing risk and these can impact on early termination costs if not addressed correctly by providers,' he commented. 'It is important for both public and private sector organisations to engage with all key stakeholders to truly understand the potential cost exposure.'

And he added that salary sacrifice won't simply replace the traditionally funded company car.

'It is important for companies to fully explore all fleet funding options, and in many cases a mixed funding approach will continue to be the optimum solution,' he concluded.

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