Driving for work is one of the highest-risk activities that most employees undertake. It is also a significant cost to the business. Employers that manage this issue well have peace of mind that they are legally compliant, are regarded by staff as better places to work, and perform at a much higher level of efficiency than those that don’t. Put simply, it is Better Business!

There are three key reasons for wanting to manage it well:

LEGAL

When asking any employee to drive for work, there is a risk that they could be involved in a collision, with the potential of injury to the driver or other road users – it’s called Work-Related Road Risk, and what many employers don’t realise is that their established work practices, or management failings could have been a contributory factor.

  • It puts your staff at risk
  • It puts other road users at risk
  • It can cost your business a lot of money
  • It puts you, your business and your reputation at risk

You therefore have a legal duty under ‘health and safety at work’ legislation to manage it properly.

In order to comply with all this legislation:

  • Your organisation must not do anything that puts drivers at risk.
  • Your organisation’s work-related driving activities must not endanger other road users.
  • Directors must put appropriate policies and procedures in place to ensure this is so.
  • All employees must follow those policies and procedures at all times.

MORAL

You also have a moral duty to ensure your staff get home safe and well at the end of each day and to see they are not put at risk by the way your business operates. Increasingly, if you want to attract younger and more diversified talent, basic compliance is no longer enough – they want to see a higher value put on staff health and wellbeing. The best business leaders of today don’t question the need for their business to be legally compliant and, while they welcome the financial benefits that good management brings, they recognise that this is simply ‘the right thing to do’.

FINANCIAL

Speaking of financial benefits, good management can help you make significant reductions in your operating costs and improvements to the efficiency of your business. Employers that manage drivers and vehicles well are able to reduce:

  • Collision repair costs
  • Maintenance costs
  • Fleet insurance and excess costs
  • Third party claims costs
  • Fuel use and emissions
  • Business mileage claims
  • Replacement staff and vehicle costs
  • Hidden management and admin costs

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Running company vehicles can be an expensive business, but often in ways you didn’t realise. According to the International Loss Control Institute, for every £1 an insurer pays out, the uninsured losses can be as much £8 – even as high as £50 for a serious incident where the company suffers reputational damage. On top of that you’ve also got increases in operational costs where the link to poor driving or poor management may not get picked up.

OBVIOUS COSTS

Insurance Excess

Every time one of your drivers has a collision, however small, it costs your business money. Any time you have to claim against your insurance there’ll be an excess to pay, usually around £500, which takes money directly out of your cashflow and profits.

Increased Insurance Premium

A few too many of these incidents and your annual insurance premium could start to rise dramatically. With the average cost of a car repair following a collision now well over £1600 having risen by a third in the last three years, businesses with a poor driving record can end up paying hundreds, even thousands of pounds more than they should for each vehicle, EVERY YEAR. Poorly managed fleets can pay x5 times more per vehicle than a well run fleet, sometimes even higher.

Leasing Penalties

Even if you haven’t claimed on your insurance, you might be paying for the damage in other ways. Do you see the bills when your vehicles go back to the leasing company? The bill for a single kerbed alloy wheel can be hundreds of pounds. Add another, and maybe a cracked bumper and you’re into thousands!

Reduced Resale Value

If you buy your cars or vans outright, then the reduced resale value of a poorly cared for vehicle means more money is needed for a replacement.

HIDDEN COSTS

These are the costs many businesses simply don’t see

Reputational Damage

A serious collision, or regular reports of poor or inconsiderate driving can quickly develop into a serious reputational problem and loss of business.

Staff Absence

Staff absence is the biggest hidden cost to business following a collision. Whether it’s a spurious ‘whiplash’ claim or something more serious, this lack of productivity can really harm the business.

Replacement Vehicles and Staff

Following a collision, the vehicle may be off the road for repairs so you might have to hire a replacement vehicle to ensure business carries on as normal.

In a more serious collision, you might find the driver is also injured and you need to get a temporary worker in to replace them, especially for deliveries.

Management and Admin Time

Someone has to ring the insurance, sort the claim, arrange repairs and replacement vehicles and deal with the HR issues. It all takes a lot of time!

OPERATIONAL COSTS

Poor driving and poor management of drivers can really increase your operational costs. Many employers simply put these down as the cost of doing business… but are they really? Effective monitoring and management can soon bring them down.

Many fleet now have telematics systems fitted to their company vehicles – computers that record data about the journey such as speed, driving style and fuel economy. This data allows them to clearly see the effect poorly managed drivers have on operational costs:

Collisions

Drivers guilty of repeated hard acceleration and harsh cornering or braking are x3 times more likely to have a collision and the cost of that collision is likely to be x3.5 times higher. That means a handful of drivers can be responsible for 90% of your claims costs.

Servicing and Maintenance

Those same drivers will go through tyres twice as quickly and cost your business x3 times as much in routine servicing and maintenance.

Fuel

Your worst performing drivers are also likely to use half as much fuel again and kick out more emissions. Fuel can be one of the biggest operational costs with many businesses spending in excess of £1 million per year.

Mileage Claims

Even those drivers who use their own cars for work and claim back the business mileage could be costing you more than you think with some drivers simply rounding journeys up while others have been known to claim for entirely fictitious journeys. Overclaiming can be as high as 25%.

Driving for Better Business is FREE to join and there are lots of FREE resources, guides and tools to help you achieve the same results. Register now for full access.

Our Driving for Better Business Champions manage their drivers and vehicles well so they can reduce the costs, and they share their stories to inspire other employers to do the same.

Business Champion AmeyBusiness Champion McLaren
Business Champion Gateshead CouncilBusiness Champion Clancy
Business Champion Iron MountainBusiness Champion HILS
Business Champion ArvalBusiness Champion North Yorkshire Fire

Driving for Better Business is FREE to join and there are lots of FREE resources, guides and tools to help you achieve the same results. Register now for full access.