On Your Bike! It’s Cycle to Work Day
Martin Nicholson outlines the value a Cycle to Work scheme can provide to an employer and their employees.
The Cycle to Work scheme in the United Kingdom, is now 25 years old. It arrived in 1999 and has gained traction predominantly in the mid-size to larger organisations in the UK. But it should be as attractive to smaller businesses, if only we all understood how it worked a little better.
The scheme was introduced as an initiative for promoting sustainable commuting options and to promote a healthier lifestyle.
While the scheme offers a range of benefits to employees, the advantages for employers are equally significant. This article delves into how the Cycle to Work scheme can positively impact businesses: from economic savings, to enhanced employee wellbeing and corporate social responsibility.
How the Scheme Works
The Cycle to Work scheme operates as a salary sacrifice employee benefit. Employers facilitate employees' acquisitions of bicycles and related equipment through tax-efficient payments. Employees can save up to 42% on the cost of a bike and safety gear, thanks to reductions in income tax and National Insurance contributions. Employers, in turn, benefit from National Insurance savings on the salary sacrificed by employees.
So How Does Salary Sacrifice work?
Employees must agree to a reduced salary for a set period of time. In doing so their National insurance and tax is pro rated. The bike and cycling equipment is provided in the form of a rental or lease for a set period of time. The bike equipment can then transfer to the individual’s ownership at the expiry of that leased period.
Because the employee pays for the bike and equipment through a reduced salary, there is no cost to the employer in the long term. It is critical to ensure you have a contractual right to recover the outstanding loaned amount should the employee leave before the term expires.
Economic Benefits
Reduced National Insurance Contributions: Employers save money on National Insurance contributions, as the salary sacrifice reduces the employee's gross pay. This can add up to significant savings, especially for larger organisations with many participants.
Lowered Sick Leave and Absenteeism: Regular cycling improves physical health and fitness, leading to fewer sick days and reduced absenteeism. A healthier workforce means lower healthcare costs and fewer disruptions to business operations.
Increased Productivity: Healthier employees are generally more productive. Regular exercise, such as cycling, can boost mental alertness, reduce stress levels, and increase overall job satisfaction, leading to enhanced performance and efficiency at work.
Attractive Employee Benefit: Offering the Cycle to Work scheme can make a company more attractive to potential employees. It is a desirable benefit that can enhance recruitment efforts and aid in retaining top talent, as it demonstrates the company’s commitment to employee wellbeing and the perceived value of the employment offer.
Reduced costs to employees: cycling to work reduces the cost of fuel, car maintenance, parking charges, or the cost of (and reliance on) public transport.
Health and Wellbeing Advantages
Enhanced Employee Wellbeing: Regular cycling can significantly improve employees' mental and physical health. This leads to a happier, more engaged workforce. Improved mental health can reduce issues related to stress, anxiety, and depression, contributing to a more positive workplace atmosphere.
Team Building and Morale: Encouraging cycling to work can foster a sense of community and teamwork among employees. Group rides and cycling events can enhance camaraderie and morale, creating a more cohesive and motivated team.
Environmental and CSR Benefits
Sustainability Goals: Promoting cycling aligns with broader corporate social responsibility (CSR) goals related to environmental sustainability. Reducing the number of cars on the road decreases traffic congestion and lowers the company’s carbon footprint, contributing to cleaner air and a healthier planet.
Positive Corporate Image: Companies that participate in the Cycle to Work scheme can enhance their public image. It demonstrates a commitment to sustainable practices and employee welfare, which can improve relationships with customers, clients, and stakeholders who value corporate responsibility.
Support and Resources
Employers looking to implement the Cycle to Work scheme can choose from several providers offering comprehensive support and resources here are just three to start with:
Cyclescheme: The UK's leading provider of Cycle to Work schemes, offering extensive resources and support for employers and employees.
Bike2Work Scheme: Another prominent provider, known for its user-friendly approach and wide range of participating bike shops.
Green Commute Initiative: A not-for-profit social enterprise focused on promoting sustainable commuting, with a particular emphasis on e-bikes.
In my opinion, when looking to launch such a scheme, you should be looking at the broad range of bike provision. Where are your nearest bike shops? There is no point advertising the scheme to find the nearest store is 20 miles away!
Conclusion
The Cycle to Work scheme presents a multitude of benefits for employers, from significant economic savings to enhanced employee wellbeing and improved corporate social responsibility. By encouraging more employees to cycle to work, businesses can foster a healthier, more productive, and more engaged workforce. Additionally, the scheme supports environmental sustainability goals, contributing to a positive corporate image. With robust support from providers and potential future developments in cycling infrastructure, the Cycle to Work scheme is a valuable investment for any forward-thinking employer who seeks to add this to its broad range of benefits.
If you would like to know more or seek to understand how best to attract candidates to your company, please get in touch for a FREE discovery call.
Martin Nicholson is the Managing Consultant at ProAction HR, providing Human Resources Services to SME businesses in Southampton, Winchester and throughout Hampshire and the adjoining counties.
Co-founder of the Winchester-based HR company, Martin and his team support clients across Hampshire and neighbouring counties, providing HR advice, HR consultancy, and HR services. They cover a broad range of HR solutions, from one-off responsive HR support to a full Human Resources service, along with Learning & Development, Training and Change Management.
“Helping organisations to thrive on the value & uniqueness of their people.”
