Vehicle-related benefits - company cars, car allowances, mileage reimbursement and the like - have drawn much attention of late in connection with fuel costs. The question being asked in many organizations, however, is whether and to what degree these benefit practices are being impacted by the price of fuel.
The answer appears to be - not really.
A just-released survey report from WorldatWork, Vehicle-Related Benefit Programs, reflects responses from 511 organizations (U.S., Canada and a number of other countries) on this subject (WorldatWork premium members can access the report on the association web site). The study shows that although nearly 9 out of 10 (89%) of respondents offer some kind of vehicle-related benefits to employers, the large majority of them (79%) report that they are not considering changes to these programs in response to fuel costs.
Other select details from the research:
Most Popular Benefits. The three most popular vehicle-related benefits are:
- Fuel or mileage reimbursement (reported by 72% of respondents)
- Automobile/vehicle allowance (65%)
- Automobile provided (company owned) (53%)
Eligibility. Not surprisingly, different employee groups tend to be eligible for different types of benefits. Fuel or mileage reimbursements are commonly extended (76%) to any employee with a bona fide need, while executives and outside sales people are the more typical recipients of company owned and provided automobiles (66% and 40%) and automobile/vehicle allowance (76% and 43%).
Car Allowances. Although car allowance amounts range based on employee level, the most prevalent monthly allowance across all levels of employee is $500 to $999.
Program Changes. For the minority (6%) of organizations who have been driven by fuel costs to make their programs less generous to employees (another 7% are considering such a change), the most common action is "limiting the number of employees eligible" (57%).
For the minority (4%) of organizations who have been driven by fuel costs to make their programs more generous to employees (another 4% are considering such a change), the most common action is "increasing car allowances and reimbursements" (41%).
Workforce Impact. In an interesting twist, study respondents were also asked about the perceived effects of their vehicle benefits on their workforces. Not surprisingly, these programs are seen as having little positive impact on attraction, motivation or engagement. A slim majority of participating companies (51%), however, do see these benefits as positively impact on employee satisfaction.
Transportation costing what it does today, I guess employees are "satisfied" to get any help they can!
Image: Creative Commons Photo "Driving Cars in a Traffic Jam" by epSos.de
I guess I don't see how the fuel or mileage reimbuirsement is considered a benefit. Either A) the company provides it for all work-related travel, or B) I claim it on my taxes and get it from that end.. At least this is how it works at my company. Doesn't the word reimbursement (the act of compensating someone for an expense) indicate that it is not a benefit but a loan that has been provided by the employee? Little wonder these "benefits" are not seen as having an impact on employee satisfaction..
Posted by: James | July 26, 2011 at 01:19 PM
The pump price are just insane. With a full size SUV, you can spend as much as $100 on a round of full tank gas.
Posted by: instant auto financing | August 11, 2011 at 08:56 PM
Considering the widespread availability of fuel-efficient hybrid cars today, maybe the reason why vehicle benefits can hardly be felt is because the costs even out in the end.
Posted by: car finance | August 18, 2011 at 11:23 PM