Why Benefit Hybridisation could be something for you and your employees
In a world of increasing digitisation and hybrid workplaces, the benefit value of a company car has evolved. Even less a “tool of trade,” most European company car drivers will now use their vehicles mostly for private reasons.
We’re used to define our vehicle need based on punctual utilization; a good example of this thought process is selecting an SUV for a once-a-year ski holiday with the family. The reality however is that most employees will not be needing a large vehicle most of the time. As a matter of fact, they will not be needing a vehicle at all, most of the time.
The fit-for-purpose principle reflects a quantification of the utilization of a company car: clearance, horsepower and trunk space are defined by what the car is meant to be used for. Salespeople, a few decades ago, were driving around with samples or marketing material and engineers needed large boxes with equipment, therefore cars had to be big enough.
The correct fit-for-purpose question has now evolved from “what car do I need?” to “do I need a car?”
Hybrid employee populations
A few decades ago, the impact of multigenerational workforces was smaller than what it is today. Boomers, alongside Generations X, Y, Z… have different requirements and make it harder for Compensation and Benefit professionals to build a once-size-fits-all package. Unsurprisingly, the major trend in the Benefit world is flexible benefits as opposed to a more traditional salary/health/pension/car offering.
Accelerated by the effects of the pandemic, it is now anticipated that employees will combine working from home with working from the office – actually, to be more correct, working from “an” office. Consequently, this will impact the utilization of the company car, reducing it for sure, but potentially cancelling it altogether.
As the matrix of parameters (generational preferences, business usage, workspace…) has become more complex and includes more variables than ever before, the solutions will have to follow. One thing is certain: the company car as it exists today (dedicated, 3-to-5 year lease, 5-seater) is no longer the most suitable option for everyone.
Compensation & Benefit experts are consequently looking into flexible alternatives to cater for the employees’ variable needs. Mobility fits this requirement as a glove.
Unfortunately, the market aspirations for mobility are (at this point in time) not realistic, as employers are looking at it as an alternative to a car, rather than as an alternative to a trip. The right model in 2021 is a – pun not intended – hybrid setup with a bit of car, a bit of bike, a bit of mobility and public transport. Infinitely more complex to manage, but the supply chain is catching up and has started providing platform-like software where these solutions can be plugged in.
The “cafetaria plans” were not hugely successful, but did get one thing right: the combination of different solution offerings is exactly how best to approach the hybridization of work, workforce and workplace.