Seven in 10 (70%) Australian business directors and decision makers believe novated leases could help them attract appropriate job applicants and retain them, according to a new survey conducted by leading asset finance provider, Metro.
Close to half (44%) believe the arrangement would help retain existing employees, while one quarter (26%) believe that novated leases would help attract new candidates.
A novated lease is where an individual leases a vehicle through a ‘salary sacrifice’ arrangement with their employer. The lease payments and vehicle running costs are made with an employee’s pre-tax pay. At the end of the lease term, the employee can choose to pay the balance and own the car outright or switch to a new car.
West Australian businesses have the greatest confidence in novated leases, with 81% indicating they would help attract and retain staff. Victorian businesses are least likely to see the benefit, with 44% saying the same.
Reviewing the survey results, Metro Finance CEO, Phillip Crossman said, “While pay packages are the most common way to leverage talent, this measure obviously has its limitations. Novated leasing is an attractive and cost-effective remuneration component that can be offered by employers; but not everyone knows about it or understands the terms of a novated lease.
“This is an underutilised strategy for HR departments and business owners all over Australia. The employee can save on their car repayments and associated running costs, and the company can offer a compelling new remuneration component, that will assist in retaining existing staff and attracting new staff.