We speak to Richard Gigsby, founding director of salary sacrifice company Grass Roots, who started the Cyclescheme. Richard talks about his desire to reduce congestion and make offices healthier.
Please explain who you are, what your business is, and what it does/aims to achieve?
We are Cyclescheme (now under Employee Solutions, Grass Roots) based in the centre of Bath and employing 45 staff. Grass Roots also offers Phonescheme and Techscheme: salary sacrifice schemes that give employees discount to the latest smartphones and gadgets. We are an administrative provider working with employers, employees, benefits providers and of course our partner bike shops.
We provide the online platform to allow employees to get a bike to ride to work on via the government’s cycle to work tax break that was originally formed in 1999 but was structured more completely in 2004. My co-founder Gary Cooper and I established Cyclescheme on February 14th (yes, very romantic) 2005, along with our good friend Jeremy Persad who is currently product manager in Employee Solutions. In brief, employees visit the bike shop and then enter the bike and safety equipment (helmet, lights, lock etc.) online for their employer to approve. Cyclescheme invoices the employer and, once paid, issues the employee with a digital voucher so they can collect their bike. The employer recoups the initial bike net cost from the employee’s wages via salary sacrifice over the following year. The employee saves National Insurance and income tax and the employer has a fitter, more productive employee!
The aim of the tax break is to reduce congestion and increase the health and fitness of employees.
What is your favourite part of your job and what is your least favourite part?
The biggest individual favourite part was winning the Fast Track 100 in 2009. We demonstrated a growth of 348% over three years and, as the first bicycle business to take part, shot straight to the top of the UK’s private businesses! This exposure provided a platform to sell to Grass Roots a year later.
My favourite part of the job is seeing and hearing about all the converts to cycling. We get more than 60% of new-to-commuting employees taking up the scheme and 25% overall are women which is brilliant. Other huge feel-good factors are when you hear that you have made a significant difference to the wellbeing of bike shops and their staff and owners of course – some even tell us that they would have likely gone out of business if we didn’t work with them.
The least favourite part is dealing with staff issues and losing contracts due to foul play by competitors!
Why did you think the Cyclescheme was so good for business when it was introduced?
We engineered Cyclescheme in such a way to remove all barriers to entry that former providers had in place – earlier providers skimmed down large businesses so they pretty much guaranteed large orders. Small businesses were ignored and now, with Cyclescheme, we work with 50% of our 40,000+ employers who have less than 10 staff. This of course is not an efficient business model but we were not going to prevent independent bike shops getting one order if possible. Our original business terms demanded cash upfront from all employers in order to protect our cash flow and this turned into a massive positive once things really began to take off. Our poor small banker kept having to ‘up’ our payment limits so we could honour our original 7-day terms with the bike shops! We were also coming from a bike shop owner background and this allowed us to fully converse and understand the psyche of our partner shops. Quickly learning that employers preferred us to do all the work allowed us to design a slick online business that could process orders 24/7.
How important is employee health for businesses, should businesses do more for their employees?
Employee health should be very important to businesses and maybe employers could do more to ensure staff health and wellbeing. The beauty of Cyclescheme is that employees get fit cycling to work and therefore they don’t have to go to the gym at lunchtime or after work. Cycling can be made as easy or hard as you like via modern geared bikes, and so many of the 500,000+ employees who have a bike through Cyclescheme have gone on to take part in sport and leisure events on their bike.
It’s very well proven that doing anything that involves basic body movement improves the health of employees. The potential savings for the NHS to be made via more cycling falls into billions.
What has been the biggest challenge for your business?
The biggest challenge has been adapting the scheme we offer to cope with the various changes imposed by the HMRC over the years. Our implementation to change has always been very swift and almost certainly always adopted as an industry standard by our competitors. We pride ourselves in providing the cycle to work scheme for the HMRC and, in doing this, they sanction our procedures for the whole of the UK. Running the schemes for the Department for Transport and Department for Health also makes us very happy!
What would you be doing if you weren’t running your own business?
I started working life as a mechanical engineer and when I was 30 I packed that in to do a Master’s Degree in Sports Science as cycling and triathlon was my passion. I ended up working in bike shops and doing freelance writing for cycling magazines. When we owned Avon Valley Cyclery in Bath, Gary and I always tried to innovate and put in an extra effort to get on. We tried many things to no avail. When we saw the opportunity arising with Cyclescheme we took big risks to do something different based on past experience and fortunately it worked.