September 25, 2020

Managing Fleet Risk Part 4

Managing Fleet Risk | Human Resource Risk

In this fourth post in our series of five on managing fleet risks, we look at the specific decisions and actions that need to be taken to manage the human resource aspects of fleet risk.

The series covers the fleet risk topics below and the links will become live as each one is published:

  1. Strategic Aspects of Risk
  2. Financial Risk
  3. Reputational Risk
  4. Human Resource Risk
  5. Legal Risk

We also have a comprehensive PDF report which includes all of the topics covered in this series – you’ll find the link at the end of the article.

Human Resource Risk

The operational aspects of managing fleet related HR risks should, undoubtedly, be at the absolute forefront of fleet decision-makers’ minds. Not only is the health and safety of individuals more important than any other aspect of the business’ operations, it also has significant cross-over with all other elements of fleet risk. Some of the key elements are discussed here:

1. Driver assessment & training – Tracking the driving performance of employees is essential to measuring overall fleet risk. This should include the number and severity of incidents across the fleet and also per individual. Drivers identified as being of higher risk should be considered for interventions such as education programmes and practical training. Fleet managers should also consider methods to promote safe driving through incentives and reduce poor driving behaviour through penalties.

2. Licensing and insurance – It is essential that organisations carry out periodic checking of all drivers’ (and additional drivers’ e.g. spouse/family member) licences to ensure that they are qualified for the vehicles which they use for business purposes and that they have not become disqualified due to traffic offences. This can also identify persistent offenders and provide the opportunity for training interventions. In the same way, for private vehicles used for business journeys, checks must be carried out to verify that employees’ insurance policies have the correct type and level of cover.

3. Driver health and fatigue – Certain disabilities and illnesses require the driver to declare these to the DVLA and employers should also be aware of any impairment to the individual’s ability to carry out work-related journeys. One piece of good practice is the use of driver declarations to verify any health issues. Periodic eyesight tests are also mandated by some employers to ensure that any deterioration is spotted and rectified with the correct prescription.

There are also laws that dictate the amount of time that a driver can spend behind the wheel without taking a break (See https://www.gov.uk/drivers-hours.) While these rules mainly apply to goods and passenger-carrying vehicles, it is also essential that employers ensure that drivers are not expected to drive for lengths of time that are likely to lead to fatigue and risk their safety.

4. Journey planning – Closely linked to the point above, journey planning is becoming ever more important from a productivity, sustainability and risk management perspective. The first question businesses should be asking is whether a car journey is really required or whether a public transport or telecoms solution would be more effective.

There are also some other considerations:

  • Is it possible to avoid journeys in the riskiest periods, such as the early hours of the morning?
  • Can visits and deliveries be scheduled more effectively so that mileage covered is kept as low as possible?
  • Can routes be planned that make the most of the safest roads (motorways and dual carriageways in general) and avoid accident blackspots and areas of high congestion?
  • Can journeys be shared by individuals attending the same meetings to minimise fatigue and journey costs?
  • Are drivers being put under time pressures that cause them to speed or to drive for extended periods without a break?

Many organisations are beginning to utilise MaaS (Mobility as a Service) solutions that allow them to assess the best mode of transport for any given journey, based on risk, cost, time and environmental impact criteria. Click here to read more about CLM’s MaaS solution.

5. Drink and drugs – While all drivers should be aware that driving under the influence of alcohol or drugs is both illegal and highly dangerous, it can be worthwhile for employers to provide some guidance, particularly on the hazards of driving the morning after consuming alcohol.

Drivers should also be made aware that certain over-the-counter and prescription drugs can have a detrimental effect on their ability to drive, some of these have prescribed limits in the blood which need to be adhered to, see the Government’s advice here. CLM has also produced a guide on alcohol and drugs and their impact on driving, click here for a copy.

6. Use of mobile devices – The law has been strengthened in recent years and penalties increased to dissuade drivers from using mobile devices illegally when on the road. The rules are reasonably clear and mean that it is illegal to hold a phone for any purpose while you are driving or in charge of a vehicle; using them hands-free, when docked in a suitable holder, is permissible but this must not distract you from driving.

Drivers travelling for business are often under greater pressure to take calls or to be contactable via electronic means; employers must make it very clear that they do not condone the misuse of mobile devices under any circumstances and have sanctions available for non-compliance.. See the Government guidance here or read CLM’s blog post for more details.

7. Vehicle condition and maintenance – As mentioned in the previous section, ensuring the maintenance of company owned or leased vehicles is relatively straightforward. However, issues can arise when drivers use private vehicles for business journeys and if certain regular roadworthiness checks are not carried out. One way of mitigating this risk is to gain proof of servicing and / or an MOT pass for private vehicles used for business, another is to mandate driver declarations that their vehicles are correctly maintained.

It can also be worthwhile providing all employees who drive for work with simple vehicle checklists to prompt them to assess the roadworthiness of their vehicles on a day-to-day basis. Declarations that these checks have been carried out should also be considered. The checks could include items such as:

  • Engine oil levels
  • Windscreen and wiper blade condition
  • Washer fluid levels
  • Coolant levels
  • Tyre pressure and tread depths
  • Lights and indicators

8. Vehicle telematics – The sophistication of these systems has grown rapidly over recent years and they can now provide a wealth of real-time information to assist in reducing fleet risk. The systems can combine GPS location monitoring, unauthorised access, movement and theft alerts, dash-cam footage capture, driver fatigue and distraction monitoring, vehicle condition and usage observations to give a holistic view of each vehicle’s operation.

The data from this can be invaluable in, not only identifying areas of fleet risk, but also implementing preventative and remedial measures to actively reduce the frequency of incidents. The effort involved in managing and analysing this huge amount of data does, of course, need to be balanced against the potential benefits.

The risk related benefits of running a telematics system across the fleet includes:

  • Enhanced journey analysis and more efficient, safer route planning
  • Identification of poor driver behaviour and training needs
  • Reduction of incidents caused by driver distraction and fatigue
  • Reduction of vehicle and equipment theft
  • Vehicle efficiency and fault monitoring and pre-emptive maintenance scheduling
  • Vehicle location reporting in the event of an accident or emergency
  • Improved accident reporting information and evidence gathering

As well as these risk related items, the organisation can also benefit from improved fuel management, reduced insurance costs, enhanced leasing contract management and reduced environmental impact.

HR benefits

While perhaps not as obvious as risks to the health and safety of employees, organisations do need to consider the fact that, if their benefit programme is not competitive, they are more likely to lose valuable members of staff and will be less likely to attract the best talent.

It is always advisable to benchmark against organisations in the same sector and geographical area to ensure a competitive position, the following operational questions should be considered as part of this exercise:

  • Which employees are eligible for a vehicle? Should you consider an ‘all employee’ car benefit for those not currently eligible for a company car?
  • What vehicle bands and value limits are appropriate for your organisation based on competitive benchmarking?
  • Can some/all eligible employees opt out of a company vehicle and take a cash allowance instead?
  • Do you intend to place restrictions on the type of vehicles available to ensure they are fit for purpose (e.g. fuel type, CO2 emissions, body style, number of doors)?
  • Will you operate an open or restricted selection of vehicle manufacturers?
  • What replacement cycle is most appropriate for your vehicles to meet driver expectations?
  • Will employees be eligible to make contributions towards their allowance to enable them to ‘trade-up’ to a more expensive vehicle?
  • When will new starters be eligible to order a vehicle? Do they need to complete a probationary period before they become eligible?
  • If you have existing, unallocated vehicles do you want newly eligible employees to take one of these rather than ordering a new vehicle?

Next in the series – Legal Risk

To read more about CLM’s approach to fleet risk management and to contact us for a no-obligation discussion click here.