Fleet Management – Whose Job is it Anyway?
When it comes to company fleet management and, more specifically, who takes responsibility for which aspects of the fleet, it seems no two organisations take the same approach.
The issues faced, tasks to be undertaken and required expertise are diverse. Consequently, there are any number of individuals or departments within the organisation that might consider themselves to be important stakeholders.
So, what does this mean for the fleet manager?
With such shared interests and responsibilities, the question might be raised about the role of the traditional fleet manager. Where does the role fit into the decision-making matrix and how relevant is it in today’s organisations?
To some extent it’s a matter of size and scope. Where an organisation’s fleet is small, relative to the size of its overall operation, the fleet manager or administrator’s role tends to be more limited. Their focus would be on the day-to-day running of the fleet, leaving more strategic elements of decision-making to members of the senior company fleet management team.
Often, the fleet plays a key role in the operation of the organisation, and potentially commands one of the largest budgets. In this case, a more senior fleet manager, or even a director may be in place. They would input into the strategic decision-making process and potentially have a team of staff assisting in the running of the fleet.
This is, of course, a huge generalisation and, either way, the fleet administrator / manager / director’s role remains critical to successful company fleet management and the overall organisation.
What about outsourcing company fleet management?
This again depends on the size and relative importance of the fleet, but also on the extent of the company fleet management that has been outsourced. Even in a fully outsourced situation, the organisation is likely to require a senior individual to oversee the relationship with the company fleet management provider, providing a link to the senior management team within the business.
For smaller fleets, the decision to outsource is often mainly determined by the desire to free up internal resources. It’s more likely here that managing the relationship with the company fleet management provider will be handled by an individual with additional responsibilities, usually within the procurement, finance or HR teams.
So, which other stakeholders tend to be involved?
No matter how senior the fleet manager, it’s inevitable that they will be required to seek input and endorsement from a range of internal stakeholders, each with their own particular area of focus.
We’ll take a look at some of these groups and consider how they are likely to shape the dynamics of the fleet.
Human Resources and Employee Benefits
Key focus: Recruitment and retention
With a current shortage of skilled workers in many fields and companies battling for the best talent, the focus on the provision of highly attractive benefit packages has become much sharper in recent years. This has been reflected in the growth of ‘flexible benefits’. Employers provide a range of benefits that the employee can select from to create a package that best fits their lifestyle.
The employer-provided car remains an important part of many of these packages. This is simply because employees continue to value the considerable advantages of a fully maintained, risk free, new car.
HR and Employee Benefit managers have the unenviable task of attempting to offer the widest choice of vehicles, to the broadest audience of employees, while keeping a firm hand on the budget reins. In recent years, this challenge has been eased through the wide range of alternative employee car schemes that have become available, such as employee car ownership and salary sacrifice. These can provide access to many of the benefits of an employee-provided car, even to those not eligible for a traditional company vehicle.
With these schemes come additional requirements from the organisation’s payroll department, to make the correct adjustments to salaries as well as accurately reporting tax and National Insurance liabilities. Payroll is often a shared responsibility between HR and the next department that we’ll examine, finance.
Finance and Procurement
Key focus: Budgetary control
Finance departments have always had a key role to play in company fleet management decision-making. They set budgets and monitor the value of assets, where vehicles are company-owned or have on-balance sheet finance arrangements.
Often based within the same department, procurement professionals are sometimes unfairly seen as the ‘budget police’ of the Finance Director. More accurately, from a company fleet management perspective, they take responsibility for developing strategies for the acquisition of vehicles that meet the budgetary and operational mobility needs of the business.
This doesn’t mean that they necessarily get involved in day-to-day vehicle purchase decisions. However, they will take an active role in developing a robust process that ensures the business gets a good deal across the provision of all of its fleet-related expenditure. This is likely to include the management of tenders for fleet funding and company fleet management support, as well as ancillary services such as maintenance, fuel, tyres and windscreens.
Risk Management / Health & Safety
Key focus: Driver safety
All organisations operating vehicles need to have a well-developed fleet policy focused on the safety and well-being of employees driving on company business. This policy will need to encompass all aspects of the risks being taken and how these should be minimised. Policy items include vehicle condition and the use of privately-owned cars, through to driver fatigue and the procedures to be followed after an accident.
Monitoring accident rates and causes as well as tracking the driving history of employees travelling on business, are all key in understanding how risks can be reduced. This may mean re-assessing certain driver’s territories or schedules to reduce miles travelled and fatigue. Also, introducing interventions such as driver training to change specific behaviours can help.
For larger organisations, responsibility for risk management is likely to be centralised within a specific department. For smaller operations, it’s essential that fleet managers, or others with responsibility for business travel, have a firm grasp on the duty of care obligations of the business.
Corporate Social Responsibility
Key focus: Reducing environmental impact
Another area of responsibility that may have a dedicated resource, but for most organisations will be shared. Running a sizeable fleet is likely to contribute a significant proportion of an organisation’s environmental impact. It’s important that this is not only recognised within its policy, but that active steps are taken to measure and reduce this over time.
Tax and National Insurance contributions are now closely tied to vehicle emissions. Therefore, delivering a vehicle choice list that embraces the latest low emission vehicles, including electrified vehicles of all types becomes is essential. The organisation’s environmental performance, its ability to attract and retain the right staff and also its financial liabilities have to be taken into account.
Transport Logistics and Mobility Management
Key focus: Keeping the business moving
Perhaps a set of responsibilities rather than the name of a department, the precise nature of this function will vary enormously depending on the nature of the business itself. For organisations involved in transporting large volumes of goods, there will be an entire company fleet management department dedicated to this operation.
For other organisations, it’s more about the mobility of people – ensuring that staff have the means to get to required destinations safely, cost effectively and hopefully with consideration for the impact on the environment.
Obviously, technology has gone some way to reduce the need for physical travel for people, but providing the right mix of mobility options remains extremely important. As well as the provision of company cars, those responsible for personal mobility will need to give thought to pool cars, short and medium-term rentals, and all other potential modes of transport. It’s for this reason that many organisations choose to outsource at least some of their broader travel planning requirements.
So how does all of this come together?
As mentioned at the beginning of this piece, there are countless different structures in place in organisations to deal with company fleet management, some more effective than others. What’s true for all businesses is that the range of expertise required to successfully manage a fleet, and to manage the expectations of each set of stakeholders, can be quite daunting. The role of the fleet manager is, therefore, often one of politician, mediator and referee in the struggle to reach a balanced outcome.
It’s because of this that many organisations look to external partners to help with some or all aspects of fleet management. Their ability to provide unbiased, and totally impartial, advice can often deliver better decision-making and ultimately a better managed fleet operation.
If you’d like to discover how CLM can help with the smooth management of your fleet, get in touch with our team of experts.