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Company car policy is no longer the exclusive preserve of the personnel department. Simon Wells looks at who is in the driving seat for this crucial employee benefit
Blame wage freezes. Twenty years or so ago, a dubious government strategy to curb inflation caused migraines in human resources departments across the country. How could they attract quality staff without simply offering more money? Cars were the answer. A company car meant your employer valued you and so it became a motivational status symbol.
The fleet was usually controlled at policy level by human resource (HR) departments. In larger companies there was often a fleet manager, but he or she was more at home with a spanner than a spreadsheet and had little influence.
This story remained the same through the 1980s. Then the recession happened, and lots of companies pored over their costs to see what could be pruned. For the first time, some noticed the fleet was usually their second highest bill - and it was largely uncontrolled. From boardrooms across the land, the call went up: get purchasing in.
Ever since, if you believe some claims, the fleet has been. something of a battleground between purchasing and HR departments. HR insists it needs to offer employees a choice of vehicles, taking in everything from a go-kart to a camper van. Purchasing points out the cost advantages of issuing everyone with navy blue Skoda diesels. The Company Car Report 1998 from Buck Consultants shows that around 42 per cent of fleets buy vehicles from strictly specified manufacturers while 58 per cent allow a much broader range of options. Thus there is no dominant trend in the market.
There appear to be two extremes to resolving the natural pull between the two sides: HR and purchasing departments seem to either clearly define separate responsibilities or enter into high levels of co-operation.
A good example of the first route is at textiles company Coats Viyella. Lyndon Davies, group purchasing manager, says: "There is no conflict between the departments. The HR directors weigh my financial input and balance this with the HR implications. Ultimately, HR sets the policy and we carry it out. It's a conscious business decision and it is our job to ensure...