Davis Langdon Case Study

When pro-active organisations seek cost savings, maximising resources is a key area to focus on. With the company car fleet accounting for the second largest overhead expenditure after salaries in many organisations, optimum fleet management is therefore critical to achieving success in maximising resources and achieving costs savings. Leasedrive Velo is an expert in this area and its reallocation policies save its clients hundreds of thousands of pounds. In the case of Davis Langdon, the cost savings (in avoided early termination fees and increased rentals on new vehicles) to date since inception in October 2008 have been over £280,000.

Client Overview

Davis Langdon is a global construction consultancy, providing managed solutions for clients investing in infrastructure, property and construction, worldwide. The firm has worked on a number of high profile projects including, the Tate Modern, Royal Festival Hall London and the Eden Project Cornwall. It is the recipient of a number of industry awards including being voted Top International Construction Consultant for sixteen successive years by the world's leading architects and their clients and has been named Building magazine's Construction Consultant/Surveyor of the Year nine times including for the last four years. The firm was named one of the Sunday Times '100 Best Companies to Work For' for the fifth year in 2009, ranked number 27. The firm has around 5,000 staff in 105 offices located in 23 countries worldwide.

Company Car Policy

Davis Langdon has three eligible levels for company cars, outside the partner scheme. Level One caters for Surveyors, Level Two caters for Senior Surveyors and Level Three for Associates. A different monetary monthly rental value applies to each.

For the three levels, there are four different company car bands, based on CO2 emissions:

  • Below 120 g/km
  • Between 121 g/km and 150 g/km
  • Between 151 g/km and 165 g/km
  • Above 165 g/km.

Additionally, Davis Langdon has been leading the way in sustainable company car policies, introducing in 2008 bold new incentives on company car allowances for vehicles with lower CO2 emissions for both staff and partners. The incentives extend to the 'grey fleet' cash allowance takers and aim to reward those who make sustainable car choices. Davis Langdon worked closely with the Energy Savings Trust and Leasedrive Velo to develop this new policy under which the firm has set carbon emissions of 165 g/km as the benchmark ceiling offering employees an increased car allowance for vehicles at or below this level. Members whose vehicles exceed this level have to make payments towards sustainable projects.

Reallocation Policy

In the current economic climate, Davis Langdon has placed a freeze on new company car orders. By introducing a reallocation policy, it not only avoids having to place a new car order for a new employee but can also avoid the rental hire costs normally incurred until the new vehicle becomes available for delivery. These are how the significant savings are principally achieved. Under the policy, any company vehicle not at the end of its lease term is reallocated to another employee when the original driver leaves.

Reallocation Policy - Cars

When a driver leave date is known the HR department at Davis Langdon informs Leasedrive Velo. The car is booked in for collection on the due date. If it is at or near its end of term lease or the vehicle is no longer suitable, it is returned to the original supplier. Alternatively, if it is well within the original lease term, which applies in the majority of cases, it is booked in for a safety and bodywork check. When these checks are completed, it is either placed in a vehicle compound or booked in for remedial work. Nine times out of ten, the car is available for immediate turnaround.

Once it has been reallocated and a delivery date identified, it is then booked in for a full valet before delivery to either office or home. The car is then checked over by the new driver before the keys are handed over.

Reallocation Policy - Drivers

The publication of the reallocation list every Monday is a much anticipated event at Davis Langdon. Often the telephones at its dedicated client services team at Leasedrive Velo's hi-tech headquarters in Wokingham are ringing within minutes. Drivers may be calling because their current lease is shortly to expire, they wish to join the company car scheme or through promotion have become eligible for the scheme.

Drivers are keen to secure the best possible car for their requirements within their entitlement and those really on the case will identify a car several months before their present lease car needs replacing. Allocations are performed on a 'first come, first served' basis with everyone treated fairly and equally.

The client services team discusses with drivers what kind of car they are looking for, what they will be using it for so the team can offer the best possible choice of potential cars available.

All drivers are automatically contacted by Leasedrive Velo one month before their present lease term ends to arrange allocation of a replacement vehicle.

The Results

According to Davis Langdon's Procurement Consultant, Peter Neal: "The impact has been significant from both a financial and efficiency standpoint. The Leasedrive Velo team has worked very hard to get our drivers to accept reallocated vehicles. They have done so in a very professional and tactful manner by working to an agreed policy framework and adopting a pragmatic and sympathetic approach.

"Besides allowing us to implement a freeze on new car orders, the reallocation policy has mitigated a major liability in terms of penalty charges for early termination. It has also helped identify those vehicles which are difficult to reallocate and those that we should be looking at avoiding when we commence ordering under a revised car policy. Savings to date are approximately a quarter of a million pounds and rising."