Hennecke Fleet Consulting
New corporate mobility - mobility budget
Employee mobility as a challenge for companies
Companies must offer attractive yet cost-effective mobility options for employees. Thanks to new providers, business models, and IT solutions, the range of corporate mobility options has expanded dramatically in recent years.
Here we show: What forms of corporate mobility are there? What are the advantages and disadvantages? What are companies' practical experiences? What providers and IT solutions are available?
Read below or watch a more detailed video: Hennecke Fleet Consulting interview with Nicolas Scheidtweiler from Employer Branding: "Mitarbeitermobilität als Benefit"​ (German only)
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What forms of corporate mobility are there?
We distinguish four levels of employee mobility in companies: traditional offers, new individual mobility offers, cash allowances, and the integration of several mobility offers using a mobility budget.s.
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1. Traditional mobility options
Traditionally, the personally assigned car (company car, official vehicle) dominates company mobility. Employee mobility is also ensured by train or public transport, plane, rental car, and taxi. The use of pool vehicles (vehicles that every employee can access flexibly at short notice) also offers a degree of flexibility.
2. New mobility offers
New mobility options have emerged in recent years. Some of these are new means of mobility, but primarily new usage models:
- Work bikes (electric or not)
- Electric scooters
- Job train tickets or Bahncard 100
- Car subscriptions (medium-term)
- Public car sharing
- Corporate car sharing
- Ride hailing (shared trips)
3. Cash Allowance
Here, the company simply pays a sum of money as part of the salary, which the employee can use freely for their mobility, regardless of which mobility alternative they choose. This is rather unusual in Germany, but is often the norm in other countries.
4. Mobility budget
A mobility budget integrates the aforementioned individual mobility options and the cash allowance in such a way that each employee can decide individually and independently of time to what extent they use each option.
For example, an employee can use their budget for a car subscription for a certain period of time, and then use the budget for public transport and a rental car during another period, and then receive a cash payout for the remaining budget.
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Advantages and disadvantages of new mobility offers
Why do companies introduce new mobility alternatives or a mobility budget? The advantages and disadvantages can be characterized by their impact on employee motivation, sustainability, and costs for the company.
Employee motivation:
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Expanding mobility options can contribute to employee motivation. The more alternatives available, the better the individual needs of employees can be met. ​
However, caution is advised: If new forms of mobility are introduced on a mandatory rather than voluntary basis, this can also have a negative impact on satisfaction. The specific situation of the company is crucial here: For example, a young company in Berlin will have different mobility needs than a medium-sized odwn-to-earth automotive engineering company.
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Sustainability
In principle, alternative mobility options contribute to sustainable business practices when combined sensibly. The basic principle here is: every kilometer traveled that is reduced is sustainable. ​
This is also relevant with regard to CSRD (Corporate Sustainability Reporting Directive) reporting and ECSM (European Certification of Sustainable Mobility) certification: This involves reporting all of a company's CO2 emissions, including emissions from employee mobility (Scope 3). ​
Aside from these government requirements, expanding mobility through cycling and walking has been proven to improve employee health and is therefore also sustainable.
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Costs
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Direct costs of mobility are generally reduced by intelligent mobility concepts, as the number of expensive kilometers driven by individual cars is reduced and other forms of mobility are generally more cost-effective. ​
This is offset by higher process costs due to the increased complexity: supplier selection, supplier management, employee selection of mobility alternatives, payroll accounting and taxation of the non-cash benefit, and, last but not least, the change management costs associated with the introduction of alternatives. ​
However, in recent years, numerous new IT solutions have entered the market that integrate various individual providers with regard to mobility usage and billing, thus significantly reducing the problem of complexity costs.
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New mobility concepts in practice
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Statistical data on the importance of new forms of mobility
How many companies have successfully introduced new forms of mobility? ​
Positive examples of companies that have successfully introduced new mobility concepts in Germany and other countries include SAP, but also Microsoft and Nike. ​
In our consulting practice, we often see a certain reluctance: While some companies offer individual services, such as a train ticket or a company bike, comprehensive, integrated mobility offerings in the form of a mobility budget have not been introduced very often. In some cases, the introduction has even been halted and the offerings reduced.
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​It is also noteworthy that the traditional company car continues to play a significant and even increasing role (even among young people) compared to alternative mobility options. This is demonstrated, for example, by a study on the mobility preferences of employees at the University of Economics and Management FOM.
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New Mobility Concepts and Electromobility
To what extent are there practical connections between new mobility offerings and electromobility? ​
On the one hand, it stands to reason that companies that promote electromobility are also interested in new mobility offerings. On the other hand, both the transition to electromobility and the introduction of new mobility concepts entail significant technical and organizational change and require significant change management effort. Some companies fear being overwhelmed if both projects are implemented simultaneously. As a result, some companies deliberately postpone one of the two projects.
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Fleet management and new mobility
Do you still need fleet management if you have a mobility concept? ​
Definitely: YES! As described, the personal company car remains a very important motivational tool and is hard to imagine in the practice of corporate mobility. The right strategy and functioning fleet management processes are therefore the foundation for any mobility concept. If fleet management doesn't work and lead to employee satisfaction, new mobility won't work either.
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Providers on new mobility and mobility budgets
Providers in Germany
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We divide the providers of mobility services and IT solutions for technical and organizational implementation into the following groups:​​
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Providers of individual new mobility forms: There are dozens of providers, especially in the areas of car subscriptions, bicycles, or scooters. Disadvantages: High volatility of the provider market; not efficient as a stand-alone solution in the larger context of a mobility budget.
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Comprehensive new mobility providers: These are corporations such as railway companies or major rental car companies. Advantages: They offer multiple mobility options (car, bicycle, train, etc.) from a single source and sometimes also offer the option of billing within a mobility budget. Disadvantages: No competition with other providers outside the group; usually no integration of company car processes or cash allowances.
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IT solutions (payment): These are providers who simply provide IT solutions to connect any mobility providers. Some of these providers come from the payment services or travel expense accounting sectors. Advantage: Different mobility providers can be integrated into a single IT solution. Disadvantages: Additional costs compared to solutions from mobility companies; often no support for related processes such as ordering mobility vehicles; no integration of company car processes.
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IT solutions (comprehensive): These providers comprehensively map corporate mobility beyond the billing process, also considering, for example, the ordering process and company car issues. These providers are often startups. Advantage: Comprehensive solution for provider-independent corporate mobility; easy integration via an interface with fleet management software. Disadvantage: Risks of using a startup as a supplier.
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Providers of new international mobility
What solutions do companies find that want to offer employee mobility in multiple countries? ​
In an international context, a further dimension to the above-mentioned topics arises: What works in Germany may no longer work in other countries because there are different providers, different employee mobility needs, different internal processes, etc. Our consulting experience: The more international the mobility concept, the more important a careful preliminary analysis and the underlying IT become!
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OUR SERVICES: Consulting on new corporate mobility
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We support you in the successful introduction of new mobility offerings or a comprehensive mobility budget, focussing on the key success factors:​
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Assessment of employee mobility preferences and behavior
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Balancing employee motivation, sustainability and costs
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Overview of potential providers and suppliers
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Support for strategic decisions
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Support in the search for specific providers / tendering
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Implementation support ​​
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Simply contact us here!
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