Eco/Salary sacrifice/affinity my employees and HR are asking how can we improve our package to secure and retain our staff?
To enhance your benefits package for employee retention and recruitment, especially with options like ECOS, Salary Sacrifice, and Affinity programs, consider structuring offerings that are both attractive and cost-effective. Here are some ways to improve these programs to support employee satisfaction and retention:
1. Employee Car Ownership Company Car (ECOS) Schemes:
- No Benefit in Kind (BIK) Tax: Although cars are not technically ‘Company Cars’, schemes are normally structured to have exactly the same look and feel as a Company Car.
- Cost Savings: ECO schemes can deliver cost savings versus traditional company car schemes for cars without any Electric driving capability.
- HMRC Taxation Status: The UK Government is introducing legislation in 2025 to clamp down on schemes they see as "contrived" so care must be taken when implementing any ECO scheme.
2. Salary Sacrifice Program: Attractive Tax Savings and Flexibility
- Promote Tax Efficiency: Salary sacrifice allows employees to reduce taxable income in exchange for benefits like cars, bikes, and other lifestyle perks, making it financially attractive. Educate employees and HR about these tax-saving advantages.
- Car Offering: Salary sacrifice works well for Electric vehicles and can be used as a perk for non company car drivers but care must be taken around vehicle suitability especially if there is any business use.
- Broaden the Offerings: Expand the salary sacrifice program beyond cars to include other high-value benefits, such as pension contributions, bike-to-work schemes, and even mobile devices or home-office equipment.
- Flexible Terms: Offer flexible and customisable lease terms within the salary sacrifice options so employees can choose terms that best suit their budget and lifestyle, increasing accessibility and appeal.
3. Affinity Programs: Offer Unique Benefits Through Partnerships
- Exclusive Discounts: Negotiate affinity deals for your employees, such as discounts with popular automotive brands, insurance providers, or service centres. Partnerships with car brands for purchase discounts or special lease deals can boost the program’s appeal.
- Additional Lifestyle Perks: Include discounts for things like fuel, gym memberships, entertainment, or travel to make the affinity program a broader lifestyle benefit.
- Local and National Partnerships: Establish partnerships with local businesses (e.g. cafes, gyms, and health & wellness centres) alongside national brands to make the program feel personalized and community-focused.
4. Flexible Mobility Benefits: Support Different Employee Needs
- Monthly Allowance for Transport: Offer an allowance for employees to use towards public transit, rideshare, or bike rentals, which can appeal to employees who don’t need a car but want mobility support.
- Hybrid Car Leasing Options: Provide hybrid leasing that allows employees to swap or upgrade their cars at set intervals, meeting the needs of employees who may only need a car occasionally.
- Mobility Budgets for Younger Staff: For younger employees, consider a “mobility budget” that can be used across different transportation modes, promoting flexibility and reducing costs for non-driving employees.
5. Promote and Communicate the Program Benefits
- Onboarding Support: Educate new hires about the salary sacrifice, eco, and affinity programs, making sure they understand the financial and lifestyle advantages available.
- Engaging Resources: Create easy-to-understand guides or online tools (like cost calculators) to help employees visualize savings from salary sacrifice or eco options.
- Regular Updates and Open Enrolment Windows: Have regular communication about any changes or new additions to the package. Open enrolment periods encourage employees to consider joining the program.
6. Wellness and Financial Benefits: Combine with Other Employee Well-Being Perks
- Wellness Programs: Support the eco-car initiatives by offering wellness benefits, such as mental health days, wellness allowances, and fitness memberships, to promote a holistic well-being approach.
- Financial Counselling: Provide access to financial advisors who can help employees make informed choices about salary sacrifice and car benefits, reducing stress and increasing program satisfaction.
Summary
Improving your package to include a variety of eco, salary sacrifice, and affinity options provides employees with choice, flexibility, and tax advantages. Pairing these with wellness and financial perks can make the package even more competitive, appealing to a wide range of employee needs and helping you secure and retain talent effectively.
LetsTalkFleet can provide independent impartial advice on the most efficient Fleet Products for your business including Salary Sacrifice, ECO and Affinity Schemes so please get in touch with any specific enquiries you have, we are available on 0330 056 3335 or via email contact@letstalkfleet.co.uk .