Travel is a company’s second largest controllable expense, but a third of all companies in America don’t have any sort of guidance or travel policy in place. And while “trust” is a reasonable policy when there are just a few of you traveling (and watching the bank balance), the minute your company grows beyond its founding team, it’s time to set some reasonable expectations. And it can be very easy!
Not everyone has thousands of unruly employees traveling the world, so the severity of the controls you want to assert vary greatly. There are several levels of travel policy that can be set up, but the most common are managed, mandated and open.
Managed travel programs are generally the domain of much larger companies who will enlist the help of an outside party Travel Management Company (TMC) or corporate travel agency to book their travel. This offers guidance, recommendation and booking by a travel professional but not much autonomy — some TMCs offer an SBT (self-booking tool like Concur) where you can book for yourself from the limited, in-policy options presented.
Mandated programs have policies in place and while often allow the employee to book on most consumer sites (Expedia, Kayak, Orbitz etc.), require the employee to “follow the rules.” Sometimes so strictly that following the rules is required “as a condition of employment.”
Open programs are light-weight programs that generally consist of high-level guidelines for the team to follow for themselves (“fly economy, not first class” or “always book a refundable hotel”), usually using consumer travel OTA (online travel agencies) sites like Expedia and Kayak or airline and hotel sites directly. This approach allows for plenty of employee freedom and is clearly the ideal for the independent-minded traveler. But as the resident bean counter, you are putting a lot of faith in the individual to act in the best interests of the company. If you can do that, bravo for building such a strong culture!
“It is not a lack of desire or willingness to follow company guidelines that drive out-of-policy booking, it is a lack of understanding caused by a breakdown in communication between the travel professionals and the traveler.”
– Kate Vasiloff, GBTA Foundation director of research*
If you are like a third of companies in the US, you have neither a corporate travel agency (TMC), a corporate booking tool (OBT) nor even a well-intentioned travel policy buried (and often ignored) in your employee handbook. Thankfully you don’t have to go all-in with regards to financial investment and draconian controls to see many of the benefits that come with a travel policy.
Benefits of a Travel Policy
Even a loosely followed travel policy can save you around 30% on your business travel!
Using a company card or setting up a company loyalty account with the big three airline alliances mean that you can start racking up the points to keep your team flying for free!
Ease of Reporting
By setting expectations on what should and shouldn’t be bought, which card it should be bought on, and how to report and document expenses, your accounting person/team’s life will be much easier.
A travel policy makes employees feel at ease that their co-workers are traveling, spending and valued to the same degree as they are.
Whether large or small, another thing to consider when deciding on whether and how to set up a travel policy is the demographic make-up of your team. Millennials now make up a third of business travelers and contrary to the inaccurate slacker perception put on them, they are nearly twice as likely to want to travel for work than Baby Boomers!
“Millennials are the newest generation of road warriors and, like their more experienced peers, they understand that face-to-face meetings remain key to getting business done,”
— Michael, W. McCormick, GBTA Executive Director and COO.
But these “road warriors” present several budgetary challenges. It’s been found that millennial travelers are 60% more likely to pay for upgrades, spend 13% more on airline tickets and are far less likely to be willing to use their own cards to pay for travel (and be reimbursed) than their elder counterparts. So as your team grows more diverse, you need to decide whether you want to tighten the restraints to keep costs down or allow for more flexibility to keep spirits high.
There are plenty of reasons why setting up with a TMC (corporate travel agent) is a good idea (customer service, negotiated rates, and hands-free booking) but most growing companies “just wanna do it ourselves!” and a clear policy, guiding best practices gives your team the autonomy to book for themselves where they want, the way that they should while keeping the company’s best interests in mind.
If you want to save money on travel, give your employees clear guidelines, and get in front of your first travel expense oopsy (flying business class because “nobody ever told me I couldn’t…”) before it happens.
There’s a Communication Gap Between Business Travelers and Employers — Skift
The Millennials Have No Patience for Your Corporate Travel Policies — Bloomberg
Does Your Company Need a Travel Policy — AllBusiness