Although the Autumn Statement included a number of changes to employee benefits, cycle-to-work schemes were largely left alone, reports Sonia Rach
It became evident that the government valued cycle-to-work schemes by protecting them under new salary sacrifice legislation announced in the Autumn Statement.
Certainly, in addition to already encouraging a greener commute, statistics by the Cycle to Work Alliance found that 77% of employers felt the scheme had a positive impact on overall employee health.
As a healthier and cheaper option, cycling has never been more accessible and affordable, with employees saving between 32% and 42% on a new bike.
Lucie Cherrington, head of Halfords Cycle2work, says: “The scheme works by the employer hiring the bike and safety accessories to the employee over a period of 12 months. Employers can choose how their scheme is run, either in specific application periods or as an open, rolling scheme. They can also choose whether to pay for the bikes by capital expenditure or to use a finance provider.
“The advantage of a finance provider is that the employer can spread the cost of the bikes over 12 months, making the initial outlay easier to manage. At the end of the scheme the employer can choose to transfer the ownership of the bike either by P11D, extended hire or by charging the fair market value.”
But how do you know which scheme works best for your organisation? Laurence Boon, product manager at Cyclescheme, believes that the best way to choose the right scheme is to always ask for more information. “There’s nothing like getting the information required from the stakeholders in question. It also helps to ensure you have a scheme that can accommodate the different cohorts or personas within your business.”
Cycle-to-work schemes are typically free to both employers and their staff and the benefits are wide and varied. Employers often save up to 13.8% on the cost of each cycling package they process. This is generated via reduced Employer National Insurance Contributions (NICs).
Cherrington continues: “Offering the scheme can help improve employee retention, reduce the number of sick days, improve employee health and wellbeing and affirm your business as promoting a green policy. Employees will be able to make fantastic savings on the cost of a new bike and cycling safety equipment – typically up to 42% on their tax and National Insurance.”
Employees that engage with staff benefits are also more likely to feel valued, rate their employer positively and be less likely to leave the business. However, how do you demonstrate the return on investment?
Boon says: “There are many ways to consider ROI. There is the economic benefit to the employer and the staff member. For example, the average Cyclescheme employee saves approximately £200 on their bike (while also benefiting from spreading the cost).
“Other metrics employers may wish to monitor in relation to the ROI of cycle-to-work schemes include staff well-being, engagement, productivity and retention rates.”
Yet cycle-to-work schemes also have a lot of intangible benefits, too, that can show ROI. These include improvements in physical and mental health, and often a happier commuter. And there may also be a positive impact on local communities, with less congestion and pollution.
Top 5 tips to consider:
- Cycle to work is an important benefit and protected by the government in the 2016 Autumn Statement
- Healthier employees mean happier employees
- Importance of making the scheme available to all employees to ensure compliance
- Get your employees the best choice and the best deals
- Keep the application process simple and quick