Connect your EV salary sacrifice scheme with reward and recognition to drive performance
As the employment market becomes increasingly competitive, employee benefits can be a surefire way to support attraction, motivation and retention. Candidates no longer just compare salary when choosing a new role, they also analyse the full range of benefits on offer and how they correlate with their needs, lifestyle, and values.
Indeed, research highlights that 65% of candidates consider employee benefits when considering job offers, while 80% of employees are more likely to stay with a company that offers well-structured benefits packages.
The focus for businesses has shifted away from generic rewards to a more tailored, flexible approach that can support the diverse needs of employees.
Rise of meaningful, money-saving benefits
One growing ‘must have’ within benefits packages is a range of salary sacrifice schemes that are both cost-effective and highly valued by individuals, such as:
- Car benefit schemes, including electric and hybrid vehicles
- Cycle to work schemes
- Car parking solutions
- Annual leave purchase options
- Technology schemes (laptops, smartphones, tablets)
- Childcare vouchers.
These are offered alongside more traditional, lifestyle focused benefits, including:
- Employee assistance programmes (EAPs)
- Retail and leisure discounts
- Travel savings
- Cashback offers
- Health and wellbeing memberships
- Recognition and reward programmes.
Why salary sacrifice car schemes are surging
Salary sacrifice schemes, especially for electric vehicles, are one of the fastest growing employee benefits.
YouGov research indicates that more than 74% of the workforce would like an EV salary sacrifice scheme at their workplace.
The appeal of these schemes to talent is evidently receiving recognition from many employers, with overall fleet numbers for salary sacrifice vehicles rocketing by 63% year on year.
As a result, more than 80,000 UK employees are now driving electric cars via these schemes, many of whom were unable to afford or access them before.
One reason for this surge is the cost savings associated with salary sacrifice car schemes. On average, drivers on Tusker’s salary sacrifice scheme saved more than £320 a month in 2023. Not only are these drivers reporting £1000 saved on fuel per year with electric vehicle options, but the schemes also reduce monthly tax and National Insurance by being paid for through salary reductions.
Budget conscious
They are also helping employees to budget more efficiently – there are no financial surprises; as the monthly cost typically includes insurance, servicing, maintenance, replacement tyres and breakdown cover, at fixed rates to protect from price rises.
As a further bonus to the financials, these schemes support wider employer and employee ESG goals by making lower-emission vehicles more accessible. For example, Tusker has successfully moved car orders from 17% electric in 2019, to 80% electric by 2024.
Some studies have suggested that electric vehicles emit 17% to 30% less carbon dioxide than petrol cars over their lifetime, massively enhancing organisational sustainability with every employee who switches to electric. Add into the mix that individuals have more flexibility to manage work/life balance and that they can reduce stress, perhaps by alleviating financial burdens of maintenance costs or surprise expenses that cars create - and some companies are super-boosting it.
Consider too that employees can gain from a more convenient commute or being able to conduct work-related travel both of which can ease time pressures. Cars can be tied to recognition too – one company offers a car as a prize for one lucky employee annually who exceeds their target.
Together, a salary sacrifice car scheme helps engagement, motivation, productivity and retention.
Take for example, Leicester City Council. Its salary sacrifice scheme with Tusker has been running since 2013 and not only delivers six-figure savings, but 50% repeat uptake.
The scheme is still delivering six-figure annual savings and has become a cornerstone of the council’s reward strategy. The savings from the scheme, originally used to subsidise travel options like bus passes, car parking and cycling, are now built into the Council’s financial forecasts.
Today, it plays a key role in supporting recruitment and retention at the council, delivering on sustainability goals and helping employees - particularly those on lower incomes - gain access to electric vehicles that might otherwise be out of reach.
As Cory Laywood, head of revenues, benefits and transactional finance at Leicester City Council, explained: “An EV is typically 20% more expensive than a comparable petrol or diesel car.
“For many of our employees, a tax-efficient salary sacrifice scheme is the only way they can afford one. I don’t think they’d be able to do it otherwise.”
Uptake remains strongest among lower- to middle-income employees. More than one-third (35%) of scheme participants earn less than £25,000 a year, and just 6% earn over £60,000.
“This definitely has the most impact on our lower-paid workers,” said Laywood. “It’s our everyday staff that benefit most.”
Employee loyalty is key
More than 50% of those who’ve taken a car through the scheme have gone on to lease a second or even a third vehicle. Increasingly, new employees are joining the scheme almost immediately upon starting their roles. The trend towards longer terms is also growing.
Ultimately, the key to a great benefits strategy is to select options that align with employee priorities, strengthen their financial health beyond pay, and deliver strong ROI.
When done correctly, benefits become a strategic asset, not a resource drain, helping attract top talent, boost employee engagement, drive performance, and provide a reward that truly helps them.
Supplied by REBA Associate Member, Tusker
Market leaders in salary sacrifice car schemes with more than 15 years’ experience.
