SMEs can capitalise on “perfect storm” with salary sacrifice EV schemes

SMEs can capitalise on “perfect storm” with salary sacrifice EV schemes

Both employer and employee will benefit from flexibility and cost-saving

SMEs can capitalise on “perfect storm” with salary sacrifice EV schemes

The growing onus on small businesses to achieve net zero coupled with the urgency to retain staff means that salary sacrifice schemes for electric vehicles are more beneficial than ever, according to Simon Hill, managing director at Pink Salary Exchange.

“If you’re an employer and you’re trying to get on the road to net zero and at the same time retain your staff, this is probably the best way of doing it,” says Hill. “It’s a perfect storm in that sense.”

In fact, a recent survey by Personio found 38 percent of those surveyed plan to quit their job in the next six to 12 months.

At the same time, pressure is mounting on advisory service providers and company directors to prioritise climate risk action. Most recently, the Chartered Institute of Internal Auditors published a guide to harnessing climate change preparedness for directors and audit committees, arguing that the responsibility is currently being neglected in many cases.

“If you’re looking at how you deal with the road to net zero, salary sacrifice gives you a way to do that and future proof it through the next 10 or 15 years, while also reducing your overall fleet costs,” says Hill.

Hill describes Pink Salary Exchange, which launched in September 2021, as the “next generation of salary sacrifice”, noting its flexibility and intuitiveness as defining features.

However, he goes on to highlight the cost-saving potential for both employee and employer as the scheme’s central benefit.

“It looks equally at the benefit to the employer and to the employee,” he says. “From an employer’s perspective it’s very low risk because it reduces the cost of operating a fleet, it helps with compliance, and it reduces mileage expenses.

“But from the employee’s side, this is a scheme that gives them choice and flexibility.”

This largely comes down to its ability to compare rates, Hill argues. Rather than having a single set of prices, the platform will perform a scan and automatically select the lowest rate in the marketplace.

Furthermore, he says, its flexible rentals-style approach allows the individual to commit to just six months at a time if they so choose, with the option to extend after each period.

“The cost to the employee is much lower and it makes their salary go further. And if you look at the other side of that, it makes it a much more valuable retention tool for the employer.”

Designed with SMEs in mind

But perhaps most importantly, Pink Salary Exchange brings a unique offering to the SME market during a time where it is needed most, says Hill.

“Salary sacrifice has always been very much focused at larger organisations, so we looked at what we could do to come up with a better solution, and one that was more inclusive to smaller businesses.”

The platform itself plays a major role in this, he says, pointing out the seamlessness of the “user-friendly” portal and the paperless system.

The service is also entirely end-to-end, Hill notes. An account management team are on-hand to answer queries and resolve any issues, meaning that the process is self-contained and seamless.

“What we’ve tried to do is make it as simple and unintrusive as possible because otherwise it adds to the employer’s costs,” says Hill.

But the uniqueness and novelty of the service is its defining quality, Hill argues, pointing out that this kind of scheme has never previously been available to businesses under a certain size.

“From the perspective of the advisor, they can now offer their small business clients something that they’ve never been able to offer before.

“We feel we’ve launched the right product with the right requirements at the right time.”

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