Company cars offer one of the best ways to attract staff and retain good employees, but at the same time have the potential to turn into a nightmare source of uncontrollable costs.

The risk of unexpected costs comes from a bewildering array of areas, ranging from congestion charge fines and parking tickets to vehicle damage.

For most companies, the dilemma is how to handle what happens next. If drivers have been negligent, then they should pay for the damage they have caused, surely?

Well, it depends on who you speak to and which department you work in. Hardened fleet managers, who see a steady stream of red-faced drivers arriving at their desks, insist that the only way employees will learn is if they are hit in the pocket. That means drivers shouldering the full burden of any fines, damage charges and repairs.

But some companies still believe they should help their drivers cover the cost of their errors, if a company car is to remain a benefit and not a burden.

Taking responsibility

The crux of the problem is where responsibility for the fleet lies. It used to sit safely in the hands of a fleet manager, who could sum up the perfect combination of disgust and anger when dealing with offending drivers to make sure they paid up.

But increasingly decision-making power is being taken away from fleet managers and transferred to other roles, particularly those of human resources and finance directors.

While these departments might understand the value of the benefit in terms of attracting and keeping the right staff – and also the value of those employees to the business – they may not be seeing the bigger picture when it comes to the cost to the business of irresponsible drivers. A softly-softly approach might encourage further vehicle abuse and also leave the company open to even greater risk.

Recently, a meeting of fleet managers from a range of companies and departments heard accusations that human resources departments are wielding too much power when it comes to running a company car fleet, resulting in lives being put at risk on the road.

In some of the worst examples, staff were being employed for jobs such as a mobile sales force, when they didn’t have a driving licence.

The focus of the department on attracting new staff and keeping them happy can clash directly with a company’s duty of care responsibilities for educating drivers to be safe on the road and disciplining them when they act irresponsibly.

‘Managers and HR would take an interest when it comes to their sales people being trained in the new Financial Services Authority rules, but when it comes to company cars they lose interest,’ members of the Scottish region of Acfo, the fleet managers’ association, were told at a recent meeting.

One fleet manager, who works in the HR division of her company, admitted the roles were conflicting. She said: ‘The problem I have is that the contract of employment has nothing about the car, but the fleet policy does.’

Another said: ‘One of our staff got a job as a mobile financial adviser, but did not drive and had never passed a test. After she got her licence, I took her out for an appraisal drive and she was terrible. I had to tell management that I couldn’t stop her from driving if they wanted her to, but I had grave concerns.’

Members heard that the focus on ‘customer service’ for employees had to be ‘flipped on its head’ when it came to duty of care.

‘Our drivers have to prove they are capable of driving a car – otherwise, they don’t get one,’ a senior fleet boss said. ‘I have a good relationship with managers and HR and I would make sure safety issues are well controlled. From a duty of care point of view, some of these cases are a potential problem.’

Road sense

The problem is how to make sure this no-nonsense approach is enforced when it means shouting down the best salesman in the business for emulating Michael S chumacher.

All too often, managers fudge the issue and don’t hammer home to drivers that they must look after their cars as if they were their own. The situation will become more serious as more companies absorb fleet management into other departments.

A survey by GE Fleet Services found that a growing number of human resource and finance directors have become more influential in making fleet decisions, claiming: ‘The fleet manager’s role is evolving into a more consultative function.’

Peter Cooke, KPMG professor of automotive industries management at Nottingham Business School, backs up the view that there were potential dangers of handing over decision-making to non-fleet experts.

‘Previous research has shown the fleet manager is letting go of the reins. They should be the experts and it is up to them to ensure boardrooms are kept up-to-date with headline fleet statistics,’ he says. ‘Company car policies are based on many factors and it is fleet managers who should be aware of the bigger picture. Decisions should not be based solely on costs – safety is paramount and that’s where fleet expertise comes in.’

Despite concerns over a shift of power, of the 850 executives questioned, almost all regard duty of care as the most crucial factor in fleet policies. A total of 95% of respondents in the GE Company Car Trends study put duty of care at the top of their agenda – up 6% from a study 12 months ago.

GE Fleet Services managing director Rich Green, says: ‘With company car drivers 50% more likely to be involved in road accidents, it seems our respondents’ primary focus on duty of care is indicative of the fact that many companies have recognised their fleet responsibilities.’

The survey showed that almost 95% have policies on the use of mobile phones while driving and almost three-quarters have, or are implementing, measures on duty of care.

The only problem is that having a policy and actually implementing it are two completely different issues.

John Maslen is supplements and events editor on ‘Fleet News’