It never forms part of the job description but the ability to juggle needs is a key requirement in this industry.

Implementing and managing a global or pan-European fleet contract is as much about balancing the needs of the different corporate departments involved as about meeting national/driver requirements.

Get it right and you’ll have a cohesive fleet policy that works well in all your markets and scores buy-in from all involved, not just the drivers.

But get it wrong, and you’ll forever be dogged by complaints from, say the HR department, that the end solution doesn’t meet their requirements.

So it’s important from the outset of any fleet policy review to ensure that you have the input of all those with an involvement in fleet, including HR, Procurement, Sustainability and Compliance, and that you are taking into consideration local legal and cultural requirements.

Whilst one party will always dominate the ultimate decision on fleet policy, it’s important that all stakeholders agree on a common objective.

Nathalie de Vries, consultant at ConsultPlus at LeasePlan International, comments: ‘When defining global fleet policies, an understanding of your mid- and long-term fleet strategy is required in order to make the right decisions at each point of the fleet management process. If there is no commonly agreed objective supported by all disciplines, there is a fair chance that decisions would be unnecessarily delayed and/or implementation of certain measures could fail.

‘A fleet strategy determined by procurement alone will be primarily focused on finding a cost efficient solution and potentially be willing to sacrifice some flexibility enjoyed by local entities or the car selection freedom of drivers. However, problems could arise if procurement wants to leverage scale and negotiate an international deal with suppliers to achieve cost savings; local entities could be reluctant to implement the chosen deal and drivers feel dissatisfied with the selection that has been made for them.

‘A fleet strategy determined by HR alone is focused on attracting and retaining the right people and wants to ensure that driver satisfaction is achieved. An HR focus will seek a fair deal for the drivers, often defined by flexibility, freedom of choice with respect to car selections and safety features. However, this freedom and flexibility do not always correspond with lowest possible cost.

‘A focus on sustainability will result primarily in a fleet policy that actively manages down the CO2 footprint and this is likely to involve the introduction of a CO2 emission cap on cars. This could result in drivers facing restrictions in their car choice, which may in turn have a negative impact on employee satisfaction. This could also lead to a conflict with procurement as the latest technologies such as (plug-in) hybrids and electric cars may not always be the most cost efficient choice in all countries.’

Another interesting point that Ms de Vries makes is that there has been the addition of a recent development that makes fleet decisions even more challenging in the form of the changing perception of company cars by the younger generation. ‘Cars are becoming less of a status symbol and decisions are more and more based on fiscal and environmental implications,’ she comments.

She concludes: ‘All in all, striking the right balance between the interests of all disciplines is challenging but possible. As long as all parties concerned are involved in defining the strategy and supporting the overall commonly selected targets, the decision-making process will inevitably be more straightforward and the implementation process much smoother. LeasePlan has developed the Fleet Balance tool to help its customers discover how they can balance all the different perspectives (Procurement, HR and Sustainability) involved in a global car policy as well as verify if their local car policies actually reflect their fleet strategy.’

Balancing the views of competing stakeholders also requires comparable data wherever possible, according to Maurice Bond, commercial director of International Fleet Services, ‘particularly as changes in fleet composition are evolutionary not revolutionary’.

He says: ‘If we take the example of Procurement and HR we can see the importance of data quite clearly. Procurement is the pro-active arm of Finance tasked to lower supply cost. If the commodity is relatively standard, there is usually a range of competing suppliers. Competitive tendering has therefore been used widely in fleet procurement, but our feedback is that there are fewer successful exercises now than in previous years. Although there is still strong competition between vehicle manufacturers, the majority of fleets involve vehicle financing as well. The lower availability of credit and the rising cost of finance has changed the fleet market considerably, and the external pressures from other stakeholders continue to increase due to compliance and regulation.’

Mr Bond says that Finance has the position to dominate discussion as fleet management systems report this kind of data comprehensively. He adds: ‘Less common, perhaps, is comparable reporting of the “softer” factors important to other stakeholders. For example, a major issue for HR is employee retention/recruitment, or “we can't recruit/keep the best because of our car policy”. Aside from the “emotional” argument of my car = my status, most of the evidence presented is from comparative surveys, much like executive pay. The HR Department should be able to identify the business “cost” of recruitment, and also to survey declined job offers to measure the impact of vehicle policy. Fleet management is in a good position to collect data from employees leaving in a similar way. Expressing the aims of HR as financial impact allows more meaningful comparison against simply driving down total cost of fleet ownership.

‘Such an approach requires cross-discipline commitment and some intelligent data gathering, but the end-result is closer to an apples-to-apples comparison to support fleet decision-making.’

Balancing talent recruitment/retention with cost control

In the wake of the global economic downturn, companies have been left trying to weigh up the priorities of simultaneously cutting costs and recruiting/retaining new talent. How can fleets best go about this? Tobias Kern, European strategic consulting manager at Fleet Logistics, comments.

‘With the effects of the economic downturn still in evidence, many major European companies have focused their attention on cost-cutting measures, particularly with regard to the purchase of indirect products and services such as fleet, as they have been forced by the downturn to reduce operating costs and professionalise their fleet processes.

At the same time, some companies also wish to be seen to be meeting their corporate social responsibilities and move their fleet towards greener and less polluting vehicles. This combination of factors has placed a greater emphasis on the effectiveness of the purchasing department as it seeks to maximise its buying power around most commodities it buys, including company cars.

This has increasingly meant a shift away from the more traditional focus on driver needs, to an increased disregard of driver sensitivities, which the company may not have had the political will or financial need to consider before.

In making structural changes to fleet policy in this way, however, there are a number of routes that companies can go down, depending on their attitude and their need to reduce spending.

At one end of the spectrum are the “soft” measures that can be introduced to fleet policies that involve subtle changes in “human” factors such as slightly reduced vehicle choice and influencing driver behaviour towards issues such as vehicle care.

At the other end of the scale, are the more punitive and mandatory “hard” measures, such as imposing car policy with little choice, reducing the car budget, removing private fuel or increasing financial contributions from drivers.

Some companies have sought to introduce cost-cutting measures that have not directly influenced the driver but which still save the company money. These have included introducing new ways to find the best possible acquisition prices from leasing companies, such as multi-bidding, and a move away from a solus supply route.

Other techniques, which do not influence the driver directly, include stricter cost control, including tighter invoice management, recalculations or vehicle reallocations, and the outsourcing of most fleet management activities.

On the other hand, some companies have opted for cost-cutting measures that have directly affected the driver, such as extending lease contracts to 48 or even 60 months, downsizing benchmark choice models or imposing financial penalties on drivers in the case of an accident.

When changing vehicle policy, but still trying to retain a balance between optimised cost reduction and meeting driver ambitions, an external fleet management company with in-depth knowledge and expertise can help make the right choices for the overall fleet set-up, optimising purchasing and introducing tight cost control measures, as well as ensuring that the calculated benefits actually happen and are delivered to the customer’s bottom line.’