Travel expenses: taming a necessary evil

With increasing fuel, air and rail travel, staff business travel expenses have become a concern for many companies. SMEs especially, with lower budget and no travel manager or travel management systems may find the process of travel cost reduction complex.
Controlling and reducing travel expenses does not necessarily mean downgrading the services provided, which could be upsetting for business travellers.
 
The first step – auditing – means that it is crucial to investigate everything there is to know about travel expenses in the company; an analysis will be conducted to investigate quantitatively and qualitatively what constitutes the travel corporate budget:

  • What is spent (sums) – total and by department/person/mode of transport,
  • How it is spent? This includes not only the level and range of services as but the way bookings are made: is there a person in charge of bookings? Does everyone do their own arrangements online? Or does the company use a travel agency?
  • Why it is spent (what are the reasons for travelling?); is it part of the company’s culture? Is it to favour one location vs. others (e.g. always meet at headquarters) or to achieve something that can only be done with everyone present? Maybe there is a psychological dimension to this tradition, e.g. with the Manager inspecting troops on a regular basis?
  • What are the timelines e.g. how far in advance are the travel tickets or hotel booked?
  • Who spends (who are the people travelling and the ones booking the trip) and how this benefits the company (or not) in terms of time and productivity (e.g. waiting times, administration time for booking or filling in expenses, etc.).

 
This audit will be the basis for a restructure of the company’s travel management policy or at least travel guidelines that should be communicated to all employees; this helps making it clear which companies to use preferably (e.g. choose budget airlines vs. regular airlines) if indirect booking is preferred, what is allowed or discouraged (e.g. mini-bar or room service), etc and the recommended timeframe for booking.
 
It is often wise to recruit external consultants for the project, as they will neither feel personally involved nor influenced by old habits implemented in the corporate culture and see the big picture. Their expertise of the subject also means that they will identify potential alternatives that meet or exceed the company’s needs; this may involve for instance checking that the IT system enables video-conferences or that the company’s fleet meet the true needs of employees to replace unnecessary journeys. They are equally able to advise on the best meeting organisation in order to avoid lost time and measure the outcomes of the trips. Thanks to an extensive benchmark, they can establish the savings realised with alternative solutions not only in terms of money, but also in terms of time and efficiency (not to mention avoiding fatigue and jetlag).
 
Once the main guidelines of a sustainable travel policy are decided, and the objectives for savings are clear, negotiations with travel service providers of all sorts can start. It will be crucial to inform and explain the new arrangements and rules to staff as this new company policy may modify the corporate culture.

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