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Company carsPay & benefitsSupplier News

‘Park round the back’ syndrome is a real corporate malaise as company car policies are extended because of the recession

by Personnel Today 22 Jan 2010
by Personnel Today 22 Jan 2010

It’s known in professional circles as ‘Banger Anger’ or ‘PRTB’ (Park Round the Back) syndrome and accurately depicts what your company car says about your business in times of economic crisis, according to Robert Kingdom, head of marketing at Masterlease.

If your company is the subject of hard times, the fleet policy is often one of the first casualties when the three year lease is extended to four or even five years and the car starts to look as tired and world-weary as its driver. The syndrome is so pronounced in some companies that employees would look for another job if the economic climate was better. Instead, when they go to customer meetings, they begrudgingly park their vehicles out of sight to hide their recession depression.

Kingdom argues that in most cases where there is a choice, the car is an emotional expression of ourselves and the company that we represent. It can say: ‘workmanlike’, ‘a safe pair of hands’ or ‘creative’ and ‘good to do business with’.

Masterlease’s own research clearly demonstrated that workers saw company cars as an important part of their benefits package. The survey last year revealed that the car represented the ‘perk of perks’ as nearly one third of those polled revealed that they would leave their job if they were offered a better company car elsewhere.

In recent years HR managers in Britain have increasingly played a major role in the fleet decision because of the perceived link to risk management strategies and the new corporate manslaughter legislation, as well as the importance of the company car as a recruitment and retention incentive. Indeed, Masterlease’s research revealed that HR directors were higher up the decision making tree than his or her opposite number in procurement when it came to fleet decisions. But the recession has meant that financial directors are now taking back control of the company purse strings.

 Masterlease warns that the importance of the company car as a retention tool must not be underestimated. Whilst workers will understand economic decisions in the short term, fleet managers need to keep in mind the status value of the company car for many employees.

 “To put it simply, treatment of staff in the downturn will be remembered in the upturn, and unpopular decisions will not have bred loyalty among workers. Although financial directors may feel that they are making the right choices in the short-term, it is pertinent for businesses to think of the long-term effects that their cuts may have on their workers,” says Kingdom.

“On the way out of the recession, as soon as opportunities become available to employees, businesses are in danger of losing their best workers who are tempted by shiny new recruitment packages elsewhere. Whilst businesses care about the bottom line in a recession, workers – while sitting tight in their jobs in the tough times – could ultimately jump ship.”

“At Masterlease we are aware that businesses will feel that they are making the right decisions for the business, but they need to avoid knee-jerk reactions of money-saving in the short-term if this will cause long-term damage to the company. Short-term gain can result in long-term pain.”

Kingdom says that extending a lease is not a bad thing per se, but companies should factor in the whole life cost of the vehicle before arriving at a decision.

“It may appear to be a cost-effective method of saving cash as after three years you will have gone through the depreciation curve and your car will not be losing a huge amount of money in terms of its RV. However, beyond four years you are entering the twilight zone of reliability and performance. Maintenance ‘creep’ will be a factor for fleet managers who will have to juggle MOTs and component failures and possible missed meetings as a result – all of which can impact the business, not to mention the wear and tear and tired look of the vehicle. Newer vehicles, even if the choice is restricted, will guarantee a more satisfied and loyal workforce, lower fuel costs, lower emissions and the associated lower BIK.”

“Banger anger may sound glib, but it is a real emotion and companies could be looking at more than just a broken down vehicle as we come out of recession – they could be looking at a mass exodus of workers as soon as the green shoots of recovery become evident.”

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