Corporate travel has been witnessing an unprecedented rise in recent years. As business models are becoming global, companies are slated to spend $1.7 trillion by 2022 to send their employees on business travels.
China is, as of now, the world’s largest business travel market, with emerging markets like India joining the bandwagon with an expected increase in business travelling expenditure by 11.3% over the next five years.
Which is why it has become all the more important to establish a good corporate travel policy since it is now a means of acquiring talent for several companies.
According to Amadeus and Lonergan’s 2018 Travel Policy Data, 44% of business travellers would actually leave a job due to poor travel policy, while 50% say that a company’s travel policy would impact their decision to take a job.
With business travel expenses having a direct impact on the company’s bottom line, the travel policies of your organisation should reflect the desire, status and expectations of your employees.
The Importance of Business Travel Policy
Despite the importance of having a business travel policy, the best practices for managing travel and expenses are often overlooked. As a result, it leads to cost and productivity inefficiency, impaired strategies of travel management and frustrated employees.
In order to secure ROI and make the most of the business travel expenses, companies definitely need to have a transparent travel policy in place. Here’s why you should take business travel policies seriously:
1. Keep the Travel Booking Process Consistent
A clear travel policy ensures that everyone adheres and follows the same travel requirements regardless of their position in the company. It helps to destroy the barriers between managers, staff, and senior management. Everyone is treated uniformly with no disparate class of manager seeking an exception from the others.
A company travel policy lays down the ground rules that make sure that employees’ trips are safe and cost-effective. In addition, they also take the guesswork out of trip planning making it clear and consistent.
2. Reduce Expenses
Preceding Payroll and Rent, Travel and Entertainment (T&E) is typically the second or third largest controllable expense category.
According to a study, T&E accounts for eight to ten percent of total expenses, suggesting that business travel has a significant impact on a business’ bottom line.
Perhaps the top benefit of having a travel policy is to cut your costs and increase your ROI. By establishing travelling agreements and partnerships with airlines or hotels, companies are able to offer reduced rates.
3. Creating Seamless Travel Policies Without Friction
A business travel policy should create clear guidelines for employees to follow without any loopholes. At the same time, tighter rules should not burden employees by coercing them to spend more time planning their trips or settle for undesirable plans.
The important thing is to find a middle route and balance it out when crafting an effective travel policy. The bitter truth is that cutting travel costs is not as easy as it sounds. Employees are often tempted to spend at the upper limit of their allowance being fully aware that it would be reimbursed anyway.
This is why corporate travel policies often witness friction with companies trying to cut costs and employees pushing right back. Therefore, apart from controlling costs, companies should also focus on drafting rules and procedures. This will contribute toward employee productivity and wellbeing with greater acceptance.
When creating a travel policy for your business, ensure that all interests are aligned to prevent business travel from becoming a source of conflict. Also, bear in mind that your business travel policy will dictate the organisational culture to a great extent.
Steps to Make Business Travel Easier For Employees
Traditionally, travel policies were framed with a prime motive to curtail over-spending by employees. Sure, enough employees understand the logic of being on a budget and not going beyond it, but spending less than the budget doesn’t necessarily come with the same weight of consequence.
Unless there’s an incentive involved, employees will not feel the need to take efforts to save the company money. That is why it’s important to take approaches to motivate employees to come under budget.
Offer cashback and reward points on the money they save or create a healthy competition to seek the top employees who save the most.
Google is well-known for its Trips program wherein any employee who is budget-conscious during the business trip earns credits that they can use for upgrades on future travel. With this model, employees are motivated to save and exercise caution without overspending.
2. Make Trip Planning Quick and Convenient
Use travel management services that offer automated solutions and apps for a hassle-free trip planning experience for your employees.
From booking, solving travel interruptions, expense reporting and more, employees should be able to plan a business trip without spending too much time.
3. Empathize and Listen
Pay attention to feedback from employees regarding your travel policy and address any concerns. It’s important that you constantly evaluate and update your policy to adapt to changing needs. At the same time take advantages of travel innovations and account for your employees’ wellbeing to show that you care.
4. Fast Payouts
Have a quick turnaround for travel expense reimbursement. Just as you would like your employees to submit reports as quickly as possible, your employees also expect to see their bank accounts credited for the funds they spend travelling to woo that super important client.
5. Balance Cost-Control and Comfort
Allow employees a reasonable range of options and flexibility to select their hotels, flights, rental cars, etc. Provide those options within your budget and enable employees to exercise their freedom at the same time.
Applications can be used for the same so that employees can get custom trip budgets based on available rates and parameters as per the company’s travel policy.
Today, travel policies are made based on monetary spending rather than employee satisfaction and convenience, leading to a scenario putting policy over people. Instead, companies must strive to devise people-friendly travel policies that prioritize on employee needs and wellbeing.