KEY POINTS:
Would you offer a luxury car if it was the only way to attract a desirable employee? Some companies do. Jane Walker, director of executive recruitment company H2R Consulting, says some employers will go to extreme lengths to win over a skilled recruit in today's tight labour market.
An H2R client recently found a senior manager he really wanted. The candidate said he would take the job - if the company threw in a BMW. The privately owned company wasn't keen on offering a car "but because they wanted to get him, they went with it".
In the competitive labour market, company cars are also "creeping into non-traditional" areas, says Iain MacGibbon, managing director of executive recruitment company Farrow Jamieson. "The financial controller used to have one; now it could be the next person down too. It is driven by candidate desire."
More commonly, though, employers are offering a choice between a car and a tempting cash option, which is typically hard to turn down. It is not unusual for a high-earning senior manager to be offered $60,000 cash instead of a car. Walker says if that manager goes out and gets a $30,000 car, they are still well ahead of the game.
Another deal offered to senior executives, says John Nevill, principal of recruitment company Numero, is a salary of, say, $150,000, and then the option to salary sacrifice and buy a certain car, such as a BMW for $20,000.
Typically, the executive is getting a good deal by being given access to the discount offered for company fleet purchases, so they usually take it, says Nevill.
It's still the case that the higher someone goes up the corporate tree, the bigger the car's engine - unless, he says, the CEO is passionate about the environment.
But despite the pressures imposed by the tight labour market, company cars are not as popular as they used to be. In 1985, the imposition of fringe benefit tax put a dent in that perk by making it tax-neutral for companies to hand out either company cars or salary, but they still serve a purpose.
"Company cars are still there. There is a long-term trend away from them but it is slow," says Dennis O'Callaghan, managing director of remuneration company Strategic Pay. "You still expect to see company cars or vehicle allowances for the top two tiers."
These days, company structures tend to be flatter, with less tolerance for gaudy displays of success. In many cases, company cars go to people for whom a car is a "tool of trade", such as sales reps and technicians.
The tight labour market is skewing things slightly - as in the case of the H2R client, employers will bend over backwards to attract staff but they'll push the cash alternative.
Companies would prefer to give extra salary rather than risk alienating the rest of the staff as they watch the new recruit arrive every day in an expensive car. O'Callaghan says it's too visible.
In many cases, employers will offer to reimburse employees for the cost of running their own vehicles, which can still be an excellent cost saving. This policy pays for your car's depreciation, petrol, maintenance - whatever it costs you to keep that car on the road, says Stella Stocks, general manager of technical services at the Automobile Association. At a time when petrol prices are soaring, hitting households squarely in the back pocket, having your fuel paid for is a real bonus.
If you are offered a company car, there might be a few conditions. In a bid to be more responsible, some companies may say you can have one, but you have to choose from the firm's green fleet. James Yates, general manager of Skoda NZ, says he is benefiting from this policy change with his range of diesel Skodas.
Companies are also well advised to find premises close to public transport for the vast majority of staff who aren't offered a company car.
Auckland's downtown Britomart development is selling offices on the basis of its proximity to train and bus links.
Whether you are given a company car can also depend on the company's location. Aucklanders are more keen on company cars than Wellingtonians, because of the sheer size of the city, says Bede Ashby, managing director of Momentum Consulting. For Momentum, there is a leased car in the Auckland office for staff to use, whereas in Wellington, staff use taxis more often.
The cost of keeping a fleet of vehicles is also turning firms off company cars, says remuneration specialist, Helene Higbee, director of Higbee Schäffler. She reports seeing a general trend away from perks like cars, adding that status perks are less popular these day. Now, benefits tend to be things which are more valued but less expensive, such as wellness programmes and flexible working hours.
And as for Generation Y - if they are straight out of university - "cash is king", she says.
It all depends on the company culture and the expectations, adds Nicola Pohlen, co-founder of recruitment firm Pohlen Kean. Multinationals tend to offer the choice of a company car to a certain level: at CEO and general manager level, and the next level down - to the marketing manager or HR manager.
"In years gone by, a company car was a status symbol," she says. "Now it's a negotiation point but not a given. There are other ways companies are attracting people."
And there's no such thing as a free lunch.
When O'Callaghan saw his old boss recently, he was told: "I always provided you with a company car, so that if I wanted you at work at midnight you had no excuse not to be there."
* Gill South is a freelance business writer based in Auckland.
