Associate Member Viewpoint: Does Your Vehicle Program Help or Hinder Your Adaptability?
As NBWA CEO and President Craig Purser highlighted at the 85th Annual Convention, “adaptability” and “flexibility” have been key themes for beer distributors in the past year.
For example, many have already made adjustments to delivery schedules and routes to tackle challenges with employee recruitment and retention. But have you looked at your vehicle program and how a more flexible, adaptable program can help you weather industry changes?
If not, you might be sitting on a clear opportunity to increase your adaptability and:
- Give employees the freedom of choice they’re looking for when it comes to the car they drive for work
- Lower your program costs and risks
- Reduce your administrative burden
- Make it easier to scale sales and merchandising teams up or down as needed
Let’s take a look at how personal vehicle reimbursement programs offer a more flexible and adaptable alternative to company cars that in turn, better position your company to adapt to changing times.
Reduce expensive fleet costs and headaches
In the current environment, not only is maintaining company fleets expensive, but it’s also difficult and expensive to even obtain cars right now. Say you hire a new salesperson, how long does it take to get them a company car if you don’t already have one on hand?
- Is a company car still a desired perk for employees? Younger employees often value flexibility over established perks like company cars. Talk to your employees—do they have their own cars they would prefer to drive if they could be reimbursed? Do employees still value company cars?
- Do all of your employees need a company car? While some employees—like high mileage drivers—may need a company car, others may not. Look carefully at the different needs of your leadership, sales managers, sales reps and merchandisers. Diversifying your programs is a great way to eliminate some cars (and the cost associated with them!) while keeping them for employees who truly need them.
- How much could you save by eliminating your fleet altogether? Is your company fleet really worth it for the amount of time and money it takes to purchase and maintain the vehicles, not to mention the liability risk it exposes you to?
For many companies, reducing or eliminating their fleet can be a significant source of savings, and reduce friction with rising costs and car supply chain issues. Learn how Virginia Eagle Distributing reduced risk and saved time by by transitioning their sales reps off company cars in this article.
Turn your vehicle program into a culture driver
The benefits you offer your employees tell them a lot about your culture and what you value. Personal vehicle mileage reimbursement is a transparent, flexible and fair benefit that stands out to both new and existing employees by its very nature:
- Transparent: employees understand the dollar value of what they are getting, what it covers, if it’s tax-free, and so on right away
- Flexible: the program benefit amount adapts to how much employees drive each month
- Fair: reimbursements are based on real, data-driven calculations that accurately pay employees based on their actual costs
- Accountable: employee mileage is recorded (ideally with a “set it and forget it” app), providing both accountability to their managers and justification for their benefit
When employees understand the how and why of the perks they’re receiving, they’re much more likely to feel satisfied with the program and stay with your company.
Personalize programs to each employee
“One-size-fits-all” is the enemy of flexibility and adaptability. As we mentioned earlier, you want to consider the specific needs of different teams to determine if company cars make sense for them. With personal vehicle reimbursement, you can even adapt your vehicle program down to the individual level.
When determining their benefit, you can take into account:
- What costs are you actually reimbursing someone for? Gas? Car payments? Insurance? Maintenance and depreciation costs?
- What are the costs you want to reimburse for? Just gas? All of it?
- What are your driver’s actual costs, based on where they live?
- How many miles is the employee expected to drive?
- How rich of a benefit do you want to provide them?
If a tailored program like this, known as a Fixed and Variable Rate (FAVR) program, sounds like a lot of work, there are also simpler options, like cents-per-mile reimbursement or car allowances, you can choose too. Or you can partner with a provider like Everlance who can manage the program for you.
Del Papa Distributing transitioned part of their team to FAVR reimbursements, and it was a win-win for the company and employees–Del Papa saved money, employees increased their take home pay and everyone was happy! Check out this transcript of LJ Del Papa presenting at the Next Generation Conference, to learn more.
The bottom line
When you do the math for your vehicle program, you’ll realize that each company—and even different segments of employees—may have different needs. As a result, you shouldn’t simply apply the same program to everyone—at least not without crunching the numbers first!
- Be open to different programs, and consider introducing flexible options for your team so you aren’t crushed by rising prices.
- Consider whether it makes sense to have different programs for different employees. For example, high mileage drivers might have a company car while lower mileage drivers can get a mileage reimbursement for driving personal vehicles.
- Try to create data-driven, transparent programs to adapt to employee needs while also protecting your budget
Everlance is a mileage and expense management platform known for its simplicity and customer service. Helping make life easier for employees while reducing program costs, the end-to-end solution can track mileage, manage compliance, deliver reports and even reimburse your team for you.
On top of elegant technology, Everlance provides flexible program management options for Fixed & Variable Rate (FAVR) personalized reimbursements, Cents Per Mile (CPM) reimbursements, expense management, risk management and mileage tracking. Each customer has a named Customer Success Manager and the help desk is available 7 days a week to support you and your employees on the road.