Zenith research shows how to implement salary sacrifice successfully
Based on research of its data, customer and market expert opinions, the firm found that a company is more likely to adopt a scheme where there is a large employee base, a high proportion of eligible employees, it has a pre-existing benefits platform and a mobile workforce. Other factors include having wide adoption amongst industry peers and a large proportion of cash takers.
Different types of adopters were also identified. Those companies who are sophisticated in their approach to employee rewards will strategically select those benefits which will lead to the greatest engagement. Others may either add as many options as possible to the portfolio to try and increase its attractiveness or adopt the minimum benefits they can but without having an understanding as to their merits or tracking their impact on engagement.
The research showed that those who took a sophisticated and strategic approach to their employee reward portfolio were the most likely to adopt a salary sacrifice car scheme, as they had taken the time to research and benchmark its attractiveness against other potential employee benefits.
Unsurprisingly, the results also backed up the fact that the ability to market a scheme once launched had a significant impact on the take up of cars. Those companies who had more open communication channels had the highest take-up. Benchmarking prices against other options for new cars in the retail market place has shown that a salary sacrifice car package can be cheaper, not only than leasing a new car, but also when compared to finance options for 3 year old cars.
Andrew Kirby, commercial director – employee benefit schemes at Zenith comments: ‘The research has helped us to identify which companies are most likely to want to implement a salary sacrifice car scheme. Salary sacrifice car schemes can be hugely popular when launched within the right companies. Employers would be advised to adopt a strategic approach, where possible, to the selection of their employee benefits and add those which have the most positive impact on engagement, recruitment, retention and motivation. In many cases, but not all, this would include a salary sacrifice car scheme. The research has also, once again, reinforced the importance of employers working closely with their provider to ensure that the benefits are marketed as fully as possible. Employees are often surprised by how a good a deal they are actually getting.’