Traditionally benefits offered in the workplace like novated leases haven’t been on the table for individuals like Neil Creasey, a contractor. However, the workforce composition is changing. Now employers are embracing a blended workforce that consists of both contract workers alongside permanent talent.
To engage an entire workforce, benefits like car salary packaging are opening up to eligible contract hires as a way to drive optimum engagement and retention, regardless of the hire classification.
Neil, a Transformation Director and contractor through Oncore Services, bought a second-hand Subaru BRZ through a novated lease arrangement with Flare and Oncore.
Neil came across this through a monthly newsletter sent by his employer, Oncore. “As soon as I saw the offer, I snapped it up. I thought it was incredibly innovative. Being a long-term contractor, I have seen permanent employees in businesses enjoy these sorts of benefits but never contractors. However, there is such a huge contract labour force in Australia, I think it presents a great opportunity for employers who are willing to consider offering these benefits to contractors too,” says Neil.
One of the most common barriers for employers is admin hassle. There is a misconception that novated leasing requires lots of paperwork, and tireless hours will be spent on the management of salary deductions, budget reconciliation, and dealing with Fringe Benefit Tax.
Josh Loy, Account Director at Flare, says “novated leases should be hassle free for both the employer and the employee. Flare’s digital-led process eliminates paperwork, simplifies salary deductions, and ensures a smooth process from the drivers first interaction, to the final day of their lease.”
Phil Mulvey, Business Development Manager at Oncore has been impressed by how simple the process is. “Providing novated leases to our contract workforce, via Flare, has been simple. It is a great addition that complements our current salary packaging services.”
For employees, the most common concern has been how payment transfers occur should they transition to a new contract or employer.
“Should a contractor decide to move on or if their contract comes to an end, they have a few options. They can transfer the novated lease across to their new employer. If their employer chooses not to support the benefit, that is ok, the contractor will make payments directly to the financier or payout the remaining finance, in full. There is a lot of flexibility. The employer also carries no liability, once the employee leaves then the car goes with them,” clarifies Josh.
With the rise of contracting, attracting and retaining high quality contractors is an important consideration for a lot of businesses that rely on this model. Businesses need to adopt and deploy engagement strategies that appeal to this group.
“At Oncore, salary packaging is a key pillar of the remuneration strategy for our contractors, and we are seeing a higher take up of novated leases,” says Phil.
To contractors like Neil, offering a novated lease can be a unique way for employers to stand out. “You go where the work is but if there is a choice between an employer that offers novated leasing and benefits to a contractor versus one that does not, that would certainly weigh your choice.”
“Obviously it is down to the individual and what they value but for me, as someone who has contracted for 20 years and has had limited options to purchase and finance vehicles in the past, there is definitely an advantage to choosing an employer who offers this,” reinforces Neil.
For forward-thinking employers who want to provide inclusive benefits to attract and retain their contract workforce, novated leasing can offer significant savings and a strong retention hook.