29 Apr Are Company Cars Still a Way to Win Talent?
The takeover of the workforce by younger generations has upended many of the easy assumptions businesses-owners used to be able to make. Leaders are starting to question what it is their new staff members actually value in a workplace. The market isn’t short on suggestions – from flexible working hours to collaborative management styles, stock options and catered lunches, there’s a wealth of advice out there for the business-owner trying to keep up in a shifting talent market.
But in the rush to meet this generation’s desire for new ways of working, many leaders might be metaphorically throwing the baby out with the bathwater. While attracting the latest and greatest talent will take a shift in how you structure remuneration and perks, it doesn’t mean getting rid of everything you know.
One perk frequently on the chopping block is the humble company car. As one of the more expensive and high-profile perks, it’s one of the first to come to mind. But is it time to say goodbye to what was once one of the most sought-after job benefits? Carbar takes a look at the costs and the benefits of this iconic perk in our latest blog.
Do people still want a company car?
The first question to ask is a simple: Is a company car still an attractive offer to today’s top-performers? To answer that, we need to take a broad look at what entices Millennials. Why this generation in particular? Contrary to what you might think, Millennials aren’t all in their mid-20s. With the oldest Millennials closing in on 40, they make up a much larger portion of your talent pool than you may be led to believe. In just five years, three out of four workers in Australia are projected to be Millennials, making them a significant determiner of what the talent market overall is looking for.
While it’s often reported that Millennials have fallen out of love with the car, this couldn’t be further from the truth. Nine out of ten Millennials still say they want a car, it’s simply economic conditions getting in the way. With significant demand but limited ability to purchase their own vehicle, offering a company car could be a way to attract loan-averse Millennials with top-rate skills. With company cars still appearing in the top five most wanted workplace benefits on many studies, there’s definitely a call to hold on to this classic perk.
Can you still afford to offer a company car?
Demand might be there, but is supply? While modern workers still appreciate the opportunity to drive a company car, is it still viable for your business to offer it to them?
Recent changes to accounting standards have made it harder and harder for organisations to retain a fleet of vehicles on lease cost-effectively. With AASB 16 coming into effect this financial year, businesses can no longer keep leased vehicles off the balance sheet. Needing to record the cost of use associated with a leased vehicle can have an adverse impact on your business’ debt, potentially impacting your ability to attract creditors.
This change has sent many businesses running to offload their leased vehicles, preferring to go without rather than accept the significant change to their balance sheet. With buying a car outright as expensive as it ever was, how can your organisation satisfy the needs of a car-hungry talent pool?
Threading the needle with Carbar
Luckily, there’s a way you can provide your staff with simple, flexible access to late-model vehicles without damaging yourself financially. Carbar is a car subscription service giving you and your employees the choice of hundreds of different cars from respected manufacturers. Offering vehicles from Jeep, Holden, Jaguar and more on a flat weekly payment including registration, servicing, roadside assistance and insurance, it’s the simpler, easier way to attract top talent.
Choosing car subscription over leasing means no requirement to record the vehicle on your balance sheet, allowing you to get your team moving without affecting your debt-to-income ratio.
If you’re interested in learning more about how Carbar can offer a perk for your employees, start a conversation about our Carbar for Business service.
Register your business today and join the Carbar revolution.