This situation is expected to continue for the next 6 months. With the Office for National Statistics reporting 1.1 million vacancies in December 2022 to February 2023. 

 

To combat these recruitment problems employers have responded by upskilling more existing staff and raising wages. Average pay growth for the private sector is reported as being 6.9% (ONS). In the future, employers are also looking to improve job quality, this may include offering better contracts, for example, guaranteed hours, improving work-life balance through offering flexibility, improving relationships at work, introducing wellbeing programmes, improving benefits offered 

 

One way of achieving this is through salary sacrifice schemes, well known schemes include childcare vouchers and cycle to work, there are also many other uses for salary sacrifice, in this article we cover some of the essential considerations when implementing an electric car leasing scheme. To implement a salary sacrifice scheme the employer needs to ensure the following: 

• Change the terms of the employee’s employment contract and employee needs to agree to this change. 

The changes should be clear and understandable. 

• The change in salary cannot be applied to the salary retrospectively 

• The changes should be shown on the employee’s payslip 

• Check with HMRC that the scheme has been implemented correctly and is approved 

• Consult with pension providers on the effect the salary sacrifice will have on pension contributions and 

particularly if the employee is near retirement 

• Ensure that participation in the scheme should not reduce an employee’s cash earnings (hourly rate) to 

below the National Minimum Wage 

• Clarify how other pay and benefit elements will be calculated e.g. overtime, pay rises, pensionable pay, 

ideally this should be notional pay (before the salary sacrifice came into effect) 

• Make it clear that the reduced salary level does have to be used for the calculations for an employee’s 

statutory payments (such as statutory maternity, paternity, shared parental, adoption and sick pay)