Restricting options in an industry where staff will change employer at the drop of a hat for a better choice of company car has been a challenge for the fleet team at Novo Nordisk, the world’s largest producer of diabetes medication.
“Choice of car is very important in our industry in terms of attracting and retaining staff,” says Neil Britland, facilities management and sourcing manager, who has been with Novo Nordisk for 16 years.
“People do change jobs for their cars, and we’ve had to bear that in mind throughout our changes.”
The fleet has gone from having a broad user-chooser policy with “pretty much every manufacturer on the list” to three badges: Audi, BMW and Volkswagen.
When the company had open choice “it was quite a task to collate wholelife costs”, according to Britland.
Joanne Brain, facilities management officer, adds: “It wasn’t consistent for the drivers, or for us, and it made it difficult to negotiate good terms with manufacturers.
“There were a few disappointed drivers at first, who could not order their preferred make of car. However, this soon disappeared and the car choice list of Audi, BMW and Volkswagen is considered very attractive.”
Brain was appointed in 2010, in a newly created fleet role as Britland, who has responsibility for buildings, facilities and outsourced provision att the company’s offices in Gatwick Dublin, was not able to spend as much time focusing on the fleet as it deserved.
She looks after the day-to-day management of the exclusively-car fleet, while Britland retains an overall view of the fleet strategy and decision-making.
The pair’s continuing focus is on simplifying processes, both for fleet management and driver relationships.
When Brain joined Novo Nordisk, vehicles were procured from three leasing providers, but in 2012 the decision was made to enter a sole supply funding contract with Alphabet.
“Working with three different leasing companies meant we had three different sets of processes,” she says. “Some suppliers had good service, while others were poorer, and we felt it would be best to go for the strongest partner. We were impressed with the risk management offer, and a one-stop shop better suited our business.”
As part of an overall green challenge within the company, the facilities team was asked to identify areas where environmental impact could be reduced.
“The company operates a ‘triple bottom line’ CSR model, where we have a financial responsibility, a social responsibility and an environmental responsibility,” says Britland.
“In terms of the fleet, we look to reduce operating costs, to cover our social responsibility by ensuring the vehicles we provide our drivers are safe, and manage risk.”
“Five years ago, we were averaging 168g/km CO2, and across Novo Nordisk we were asked to identify target areas where we could reduce our CO2,” he adds.
The pair set about implementing a scheme to accelerate the uptake of lower emission vehicles across the fleet.
Brain says: “We said then, by the end of 2015, we would hit 120g/km. At present, we’re at 123g/km, and we have no doubt we’ll meet the target by the end of the year.
Novo Nordisk introduced an incentives scheme which encouraged drivers to select vehicles with CO2 emissions lower than 115g/km by offering them £250 worth of ‘green vouchers’ for John Lewis or other high street stores.
The threshold was subsequently reduced to 110g/km to keep pace with improved in engine technology.
“Manufacturers have driven down CO2 so much that our threshold for the vouchers is now 100g/km,” Brain says.
In the past 18 months, 82 Novo Nordisk drivers have taken vehicles that have been eligible for the reward scheme.
Switching from Allstar fuel cards to ‘pay and reclaim’ has also led to drivers choosing low-CO2/high-mpg cars.
Brain explains: “Because they tended to have higher capacity-engined cars, when they had to pay for the fuel themselves, they began to notice the significant difference in economy. This also helped encourage drivers into cars with better fuel consumption and lower CO2.”
Britland adds: “It wasn’t just the business mileage claims that drivers were paying attention to – by taking a more economical car, they saw benefits on their private mileage spend, too.”
Novo Nordisk gives all company car drivers the option of receiving a £500 float to cover any out-of-pocket expenses (purchase of fuel, oil, maintenance, car cleaning and other business travel).
Employees sign to say they would like the float to fund business costs, and that they understand that the float is to be refunded when they leave the company (deducted from their final pay slip).
Drivers are responsible for recording both their business mileage and fuel usage.
The company’s finance department, in conjunction with the fleet team, has recently introduced The Miles Consultancy’s mileage audit system, where drivers log their own verified mileage, reducing financial administration and providing the fleet team with an accurate picture of vehicle use.
The fleet policy is reviewed annually, and Brain and Britland look closely at models on the list across the three badges.
“They have to be five-door, for practicality,” says Britland. “Many years ago, we had three-door and convertible models on the fleet. They weren’t portraying the right image, and they were difficult to reallocate.
“We select a variety of models to suit the needs and wishes of our drivers, making sure there is a mix of manual and automatic vehicles. We work in each band to ensure the figures stack up, but it’s only when we get to the very senior level that CO2 may hit the top end of our range – though we still include a low emission option.
“Of course, executives can choose to trade down. It’s one of our most successful policies – drivers can contribute to trade up to the band above, or they can receive a cash payment by opting to go down one or two bands. Trading down has benefits for the drivers, in terms of tax and CO2.”
As part of the process of replacing a company car, Brain will talk to each driver to ensure the vehicle being ordered is likely to meet their requirements over its three-year, 60,000 mile cycle.
“We’ve seen quite a few drivers switch from manual to auto gearboxes recently, for a couple of reasons,” says Britland. “The amount of day-to-day driving means that an auto is becoming more appealing, and the reduction in CO2 levels for these models has helped to make a switch more feasible.”
Brain adds: “We had a run a few years ago of drivers making requests to change vehicles due to back issues, particularly if they were in a sport model. When people place an order now, I ask if they’ve had any previous medical or back issues, and accordingly advise them to go for a model without sport suspension and/or automatic if necessary.
“We don’t want to be in a situation where a driver is requesting to swap out of their vehicle after six months because it isn’t practical.”
Driver safety and risk management has been a key area for Novo Nordisk. It adopted Alphabet’s risk management solution to provide a better overview of the risk posed by its fleet operations.
“Joanne and I also look after health and safety. In the UK we don’t have any manufacturing facilities, so generally the risks are quite low, until you take into account running 300-400 cars,” says Britland.
“A few years ago, our driver risk handbook was 128 pages, and no one was ever going to read that,” says Brain. “We want to support our drivers with as much information as we can, but in a format they will find useful.”
She worked with Alphabet to develop a pack that was more driver-friendly. It contains a copy of the company car policy, a road safety manual, the insurance certificate, winter driving and vehicle maintenance tips, and a copy of the Highway Code.
Novo Nordisk’s risk management system is primarily data-based, making use of driving licence checks and online driver profiling.
Britland explains: “The online profiling is completed annually and includes questions on the highway code and our company car policy. It takes into account the vehicle they drive, their mileage and time spent driving.
“There’s some psychometric profiling included, and we get a dashboard with an overview, highlighting our high-risk drivers. It’s pretty good at helping us to identify next steps, such as practical training or basic education. At the moment, our practical driver training is on a reactive basis.
“We investigated blanket driver training, but the costs are massive. We felt doing something like this allowed us to target the high risk drivers.”
Incident levels are also monitored, and any trends are identified for further action. The scheme has had benefits for the company’s insurance terms.
Britland says: “We informed our broker of what we were trying to do with the introduction of the enhanced risk management, and at renewal we had to provide some data to substantiate that. They will continue to monitor that and together we will closely monitor our claims record to ensure we’re taking data on board.”
Novo Nordisk does not permit the use of private vehicles for business use – those needing to drive use either a pool car or a daily rental as it gives “greater control”.
Another element of Brain’s job is monitoring any claim reports that come in from drivers, and ensuring that their health and wellbeing is catered for.
“We investigate every report that comes in and if we believe there is a chance the driver has suffered an injury, we will then investigate,” she says.
Risk management for overseas drivers
Novo Nordisk’s UK operation takes on overseas graduates as part of its sales programme. These are often young drivers from Europe, with little experience on UK roads.
Joanne Brain, facilities management officer, says: “We won’t let a graduate take out a car until they have taken a UK familiarisation course. They’re quite young and some of the cars are powerful. We provide a day’s driver training to assess if they are able to go out on our roads, or whether they require further tuition. We do not want to put them at any risk.”
In addition, all overseas drivers will be put through the online risk profiling system, so that the company has a complete view.
Neil Britland adds: “Every employee from overseas is offered the programme, but we insist that company car drivers take it.”
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