Only 10 per cent of employees value company cars as a benefit, a trend heavily influenced by attitudes to remote working, economic uncertainty and sustainability, according to a major new study by specialist HR recruitment firm Wade Macdonald.

In their survey of 850 HR professionals in non-management, management, senior management and directorate roles, the firm also found a significant divergence between how many employees can access a company car and how frequently this benefit is actually used.

An average of 10 per cent of employees across all levels value access to a company car as a useful benefit in their employment package. This changes slightly when analysing what people think at different managerial levels.
Just over 5 per cent of non-management see a company car as an important benefit and only 5 per cent have access to one. At management and senior management, the value rises to 10 per cent and at director level, the value reaches 15 per cent.

However, access to a company car for the two upper management levels is significantly higher than access to a car at lower levels. Just over 34 per cent of senior managers have access to a company car and 44 per cent are director level and above.

Far fewer use the benefit, though, even if they have access to it. Only 9 per cent of senior managers and 8 per cent of directors actually use the company car they are entitled to. 5 per cent of management utilise this benefit and only 2.5 per cent of non-management.

Chris Goulding, Managing Director of Wade Macdonald, believes changes in working practices, economic uncertainty, and employee values may be reasons for the decline in popularity of the company car benefit.

“Remote working has certainly had an impact on organisational management since the COVID-19 pandemic. Our previous research showed that only 10 per cent of people now work in the office full-time. With less of a requirement to travel to and from work every day, it makes sense that people no longer see having a company car as a benefit that will improve their working life.

“The rise of remote working can also be attributed to the costs of commuting. Rising fuel prices have impacted many commuters, and so having another tank to fill may be seen as more of a drawback than a benefit.

“With less certainty around the economy in general, cutting costs on benefits that employees do not utilise will allow companies to allocate more resources into areas they will see value in.”

Sustainability also has a role to play in the shift in benefits. Goulding continues:
“There’s no doubt employees will be factoring sustainability into their decision-making on what benefits they use – our research has shown that 54 per cent of HR leaders are integrating sustainability into learning and development initiatives.

“With the government banning the sale of petrol and diesel cars in 2030, more car fleet sellers are looking to bring Electric Vehicles (EVs) into their company fleets. However, recent tax hikes and other economic pressures mean companies are having to ditch salary sacrifice schemes that helped employees purchase an EV.

There is still a long way to go before commuting is actually sustainable, and this is highly likely to have impacted how many people choose to use a company car.”

Wade Macdonald frequently conducts research around issues relating to HR and accountancy and will be releasing their salary guide later in August.