Budget Planning for 2020?
Enhance employee rewards, save money and gain incremental new vehicle registrations.Tags: Automotive Consultancy ECOS Taxation
Enhance Rewards, Save Money and Keep Your Best People
2019 is seeing a continuation of external macro pressures such as CO2 tax band increases and Brexit, which is impacting consumer confidence.
This market shift means there is a consistent demand for skilled employees in key areas, with dealers looking to boost staff rewards to retain and attract the best people. According to the 2018 BDO Motor Salary Survey, aftersales departments have seen the biggest wage increase due to pressure in the labour market and desire to retain technicians.
This shows that despite the new car market being down, salaries have increased above the rate of inflation delivering a real term pay increase as dealers strive to retain their best talent.
“Once management pay is excluded, there has been an average 3% increase in dealer pay, with aftersales employees seeing increases above this average.
“The ability of businesses to offer appropriate remuneration packages and structures is essential to dealerships if they are to sustain competitive advantage and achieve growth.”
Market-Leading Employee Car Ownership Schemes from Car Benefit Solutions
To help manage this challenge, Car Benefit Solutions has worked closely with automotive manufacturers and their respective dealer networks to develop market leading solutions that allow dealers to enhance employee rewards, save money, gain incremental new vehicle registrations.
Tax robust and compliant, CBS products are tailored to the needs of each business and can be used dynamically to keep dealer employees feeling genuinely valued and motivated whilst moving closer towards business goals.
One of the huge benefits of using CBS schemes to deliver flexible savings to your dealership is that they are adaptable. You’re in control and you can control the level of benefit to suit your business and each employee.
Employees currently entitled to a car benefit, who choose a CBS product as an alternative do not pay company car tax liabilities, and no employer Class 1A NIC applies. It also offers protection from uncertainty and future increases.
The CBS all employee product offers affordable access to popular models, creating increased brand affinity alongside flexible repayments that can be tailored to meet business objectives. Collectively this encourages dealership-wide staff loyalty and retention, while simultaneously increasing profit opportunity.
Fundamentally, be dynamic with your use of CBS car schemes and your dealership can deliver a cost effective equivalent to a pay rise simply by offering your staff a saving on their scheme car.
The flexible nature of ECO Schemes allows employers to manage the monthly repayments to optimise the benefit for both the employee and the business, keeping your best employees feeling valued whilst moving closer towards monthly, quarterly and annual sales targets.
In the above example, an employer wishes to offer a strongly-performing employee a 5% pay increase. This employee is currently earning £50K a year and paying 40% tax. The increase equates to £121 per month for the employee once tax and NI are deducted and including Class 1 NIC the cost to the employer would be £2,845.
However, the dealership could utilise a CBS ECOS to deliver a reward for the employee and savings for the employer.
If the employer instead decided to offer a £2% traditional salary increase alongside paying £75 per month of employer interest on the vehicle, the employee would achieve the same actual salary increase, but the dealer would make savings on the pay rise of over £800.
Future-proofing your employee benefit provision
Utilising your car scheme as a dynamic business planning and budgeting tool can help you save money, drive additional registrations and keep key employees motivated. Many will be looking ahead to 2020 anticipating an unpredictable market with multiple external challenges. As a result, tactical registrations and a motivated workforce will be critical to success.
Contact CBS to discuss how we can design a bespoke scheme that delivers cost efficient savings to your business.