How bicycle leasing contributes to a more attractive wage policy

Demands for higher wages only continue to rise. As HR department, you're happy to accommodate staff. But unfortunately, your budget is not limitless. According to Jolien Verlinden, HR consultant at Effectis, bicycle leasing offers a great solution in this regard. "It costs the employer nothing and for employees it offers tax benefits. With bicycle leasing, you focus on more than just wages."

Why wages alone are no longer enough

Want to motivate your employees with just a competitive salary? Those days are gone, unfortunately. "The tax burden is high and employees want to get the most out of their wage", Jolien explains.

So what is enough then? "Employees increasingly want to be paid 'à la carte'. This might be by offering cafeteria plans or flexible remuneration options. That way, employees choose the benefits that best suit their lives. What that benefit is often changes over the years."

There are also generational differences.  Millennials and Gen Zs, for example, look not only at their pay, but also at the employer's values and standards. "Employers who are committed to sustainability, well-being, flexibility and transparency are more interesting in the eyes of these generations." 

Bicycle leasing as a strategic choice

Bicycle leasing meets demands like à la carte pay and generational differences, because employees choose their own lease package and bicycle. So they go for the bicycle that best suits their lives.

Through bicycle leasing, you also show your employees that you care about their well-being. Especially if you encourage your colleagues to cycle to work. "Employers who focus on well-being and sustainability will reap the rewards for it. Because employees who attach importance to these issues see like-minded employers as more attractive, and are more loyal to them", Jolien explains. 

A major plus for your sustainability policy

In addition, bicycle leasing is also an asset as regards the CSRD, which has recently become mandatory. CSRD stands for Corporate Sustainability Reporting Directive. The CSRD is EU legislation that focuses on sustainability and the way in which large, publicly traded companies report on it.

Ultimately, smaller companies may also be required to report on their sustainability initiatives. Companies who start bicycle leasing now can easily include it in their future reports as one of the pillars around sustainability or ESG. 

"Sustainability initiatives are also valuable in the short term. They show that you are actively working on sustainability and taking concrete steps. What's more, you give employees clear insight into your efforts through your reports."

War for Talent: en garde competitors

In addition, bicycle leasing is a valuable asset in the war for talent. Jolien notes that some companies are highlighting their bicycle leasing in recruitment campaigns. And employers also present it as a trump in job interviews. "You can really draw on bicycle leasing in the war for talent, and there are also employees who ask during job interviews if bicycle leasing is possible."

Bicycle leasing: no impact on wage cost

"For clients who want to optimise wages, I recommend bicycle leasing, if it is in line with their goals. Especially since it doesn't cost the employer anything, while providing a nice tax benefit for employees. So it's definitely a win-win", Jolien confirms.

How bicycle leasing is budget neutral for employers? You don't pay anything yourself for your employee's lease bicycle. At o2o Bicycle Leasing, we also don't charge any start-up costs, so it really is budget neutral. 

As that might be a bit abstract, we'll give a calculated example of how bicycle leasing is cost-neutral:

Does bicycle leasing also fit into the broader remuneration policy?

Yep, you offer it as a stand-alone benefit, or you integrate it into your broader remuneration policy. "It often combines nicely with other forms of flexible pay. With the mobility budget or the cafeteria plan, for example", Jolien explains. 

Companies that already have cafeteria plans can easily incorporate bicycle leasing into them. Because o2o's tools integrate seamlessly with flexible remuneration partners and cafeteria plans. That way, you don't have to work with ten tools at once (phew) and you easily track your bicycle fleet.

Be sure to read everything about  bicycle leasing and the mobility budget

That's why your employees want bicycle leasing

So for you as an employer, bicycle leasing is pretty interesting. But is that also the case for employees? "Bicycle leasing is a popular fringe benefit among employees. What's more: figures show that bicycle leasing is among the top 5 most chosen benefits of the cafeteria plan", Jolien confirms.

Why?

• Health benefits: both mental and physical
• Tax advantage of up to 40% compared to a private purchase
• Sustainable option: ever more employees attach importance to sustainability

Why don't all organisations offer bicycle leasing?

There are many organisations that offer bicycle leasing, but there are others that don't as yet. How come? It is often due to one of these three reasons:

• ‍There is no legal basis for bicycle leasing

This is not the case in the private sector, but in the public sector, there are still a number of sectors where there is no legal basis for bicycle leasing through gross wage substitution. Bicycle leasing is only possible via net wage substitution in these sectors, which is less interesting from a tax perspective.

• ‍Tension between blue-collar and white-collar workers

White-collar workers often have more possibilities than blue-collar workers to make their wages flexible. Because blue-collar workers are more likely to work on a pay scale, they have less wage flexibility. This makes bicycle leasing via gross wage substitution difficult, because you risk paying blue-collar workers below the pay scale. And that's not the idea. 

Companies who employ blue-collar and white-collar workers often want to offer benefits to both groups. But the limited wage flexibility of blue-collar workers sometimes makes that difficult. As an employer, you can make an employer contribution to make it more interesting for blue-collar workers.

• ‍Employers are not aware of the benefits

Organisations are sometimes not aware of the benefits of bicycle leasing or that it is completely budget neutral. Until they discover that it is budget-neutral and also a strategic choice for HR policy 😉 .

Bicycle leasing: budget neutral and strategic

In short, bicycle leasing is a budget-neutral way to enhance your wage policy. You meet the demand for flexible pay and give employees a tax-advantageous extra without increasing wage costs. At the same time, you demonstrate your commitment to sustainability and well-being, which is an asset in recruitment and retention. A simple intervention with an impact on both your current and future talent.