The modern business arena is constantly evolving and growing. We are seeing exciting new technology and fresh business opportunities, which inevitably means that costs rise as businesses invest in these developments. As a result, keeping overheads down is trickier than ever for those handling the financials of a business, no matter its size.
Business travel, when not managed properly, can be unnecessarily expensive and is often one of the greatest costs to a business. While there are a number of ways to control the costs that come with business travel, perhaps the most effective solution is ensuring that a travel policy is in place.
Designing an effective travel policy looks different for every business, and leadership teams should make sure they implement a plan that is flexible, detailed, and right for the individual business. A properly designed and implemented travel policy will bring about multiple benefits, including:
The potential cost savings brought about by a travel policy depend on just how detailed you make it. For instance, mapping out a detailed plan that highlights preferred suppliers that have been researched on categories such as cost, customer satisfaction and discounts should be amongst the top items on your list to assess. In addition, the more you work with a preferred supplier (be it an airline, hotel chain or car hire company), the more room you have for negotiation on preferred rates.
Furthermore, clear guidelines throughout the travel policy will prevent errors, incorrect bookings and other costly mistakes that are surprisingly common. It’s also wise to include guidelines for advance booking, as the earlier travel arrangements are made, more competitive rates are available.
Employee participation and satisfaction
Along with cost efficiency, the overall goal of a travel policy should be to eliminate any grey areas for employees who will need to follow the policy. Getting employees on board shouldn’t be a difficult task, and the more involved they are in the process, the more willing they will be to comply.
Ask for their input – which suppliers have they worked with in the past? Who would they like to work with in the future? Is there something they would like to see included in the policy? By showing employees that their opinions are valued, they will be motivated to adhere to the policy and make decisions that will ensure further savings when they travel for business.
As a result, not only will employees know what is expected of them and what they are entitled to, they will also have the confidence that their employee is showing a real duty of care and selecting quality suppliers. An effective travel policy must spell everything out from booking through to reimbursement processes and time frames, as well as miscellaneous fees such as baggage, taxis, and food allowance. Employees should also know whether they are expected to arrange their travel plans or liaise with a designated person within the business to do this on their behalf. The goal is to maximise efficiency, procure travel through the appropriate channels and ensure this is done in the most cost-effective way.
Duty of care
A business is responsible for the safety and well-being of its employees, including those engaged in business travel. This means that companies are responsible for ensuring the safety and comfort of their employees while they are travelling for work, for matters as simple as a rail strike or much more serious instances, such as natural disasters or terrorist attacks.
A detailed travel policy will mean that all aspects of business travel will be streamlined. This will ensure that you can react swiftly and accordingly in order to assist any employees who may experience travel disruption, no matter the size of the problem. Your responsibilities of duty of care as an employer should also be taken into consideration when developing a travel policy.
As with any business policy, having guidelines and a plan in place means you can monitor performance, cost, and effectiveness. A clear process makes it easier to know if the steps are being followed properly, or if certain elements of the plan aren’t performing. By tracking a travel policy, you will know if any aspect of it is being abused or misunderstood, which will allow you to quickly intervene and correct any mistakes or miscommunications.
Closely monitoring the policy will also make business travel spending more visible, which is invaluable data. This allows businesses to monitor which areas of business travel are costing the most, the least, and where any adjustments can be made to further improve cost efficiency.
CT Business Travel is a corporate travel management specialist. For more information on implementing a travel policy, please click here