Survey: Fuel Costs Seem to Play No Role in Vehicle Benefit Programs

Photo by istockphoto.com
Photo by istockphoto.com

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 percent) of respondents offer some kind of vehicle-related benefits to employers, the large majority of them (79 percent) 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:

  1. Fuel or mileage reimbursement (reported by 72 percent of respondents);
  2. Automobile/vehicle allowance (65 percent); and,
  3. Automobile provided, company owned (53 percent)

Eligibility

Not surprisingly, different employee groups tend to be eligible for different types of benefits.

Fuel or mileage reimbursements are commonly extended (76 percent) 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 percent and 40 percent) and automobile/vehicle allowance (76 percent and 43 percent).

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.

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Program Changes

For the minority (6 percent) of organizations who have been driven by fuel costs to make their programs less generous to employees (another 7 percent are considering such a change), the most common action is “limiting the number of employees eligible” (57 percent).

For the minority (4 percent) of organizations who have been driven by fuel costs to make their programs more generous to employees (another 4 percent are considering such a change), the most common action is “increasing car allowances and reimbursements” (41 percent).

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 percent), 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!

This was originally published on Ann Bares’ Compensation Force blog.

Ann Bares is the Managing Partner of Altura Consulting Group. She has over 20 years of experience consulting in compensation and performance management and has worked with a variety of organizations in auditing, designing and implementing executive compensation plans, base salary structures, variable and incentive compensation programs, sales compensation programs, and performance management systems.

Her clients have included public and privately held businesses, both for-profit and not-for-profit organizations, early stage entrepreneurial organizations and larger established companies. Ann also teaches at the University of Minnesota and Concordia University.

Contact her at abares@alturaconsultinggroup.com.

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