8 Ways to Minimize Costs and Maximize ROI on Employee Travel
This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.
Whether you have a sales force of two that only does the occasional overnight, or you maintain an army of road warriors and have your own travel coordination department, these 8 tips will help you get the most out of your company's travel budget.
1. Know your travelers' needs.
Talking to your employees about their travel needs is one of the best ways to keep costs down. This doesn't just include selecting smoking vs. non-smoking, or aisle seat vs. window, but rather asking your road warriors “what do you really need to feel comfortable traveling?” You may find that certain employees don’t care for a king-sized bed or wouldn't mind taking a red-eye flight so that they can return home to family earlier.
Prepare a simple travel questionnaire for each employee to fill out. Ask them what their preferences are by priority and have it on hand when making their travel arrangements. In addition to standard questions regarding flight seating, bed size, and rental car preferences, be sure to include detailed preferences such as dining choices, special health or disability accommodations, and even whether they like rooms on the first or fiftieth floor (some travelers feel more secure in rooms off the main level).
By giving each employee this simple “needs” analysis, you will save money on things the employee didn't care about while maximizing their comfort (and efficiency) while away from home.
2. Save your resources for when it counts.
Before a trip is ever booked, talk with your team to decide whether the trip is really necessary. Meetings that can easily take place via conference call or web interface should almost always happen in-house. Google Voice and Skype are low-cost video-conferencing options that work well.
However, if the trip has the potential to produce an on-site contract signing or another major milestone, the investment should be made. There is no substitution for the candor and connection that results from grabbing a drink or a quick bite to eat with a would-be client.
By betting on only the best opportunities, you can keep your team sleeping in their own beds more often.
3. Let the team know what's going on.
Everyone is feeling the economy, and while it may be acceptable to give a blanket “we are putting you in coach because we need to save money” excuse, providing even a bit more of an explanation can put you in the good graces of your employees.
Your team needs to be assured that their comfort and safety will always come first. For each cut in the budget you make, explain your reasoning to the team. If a switch in hotel vendors is made, give an adult explanation to why it’s being done and how the change can positively affect pay and benefits.
Putting the cuts in a “team-oriented” light will bring a sense of unity to those most affected by cuts. If the CEO is also expected to fly coach, middle-managers will be more likely to swallow it easily. Remember that these are capable adults being sent out to represent your brand and mission, not kids being shuttled off to day camp. The level of respect you provide will directly equate to higher morale, better sales, and a more loyal workforce.
4. Take advantage of corporate discounts.
If you don’t already have a group rate set up with the hotel or rental car chain that you use the most, this is the perfect opportunity to ask for a discount. Many companies offer details on their website, but a simple call to their corporate office can get you going in the right direction. Discounts can vary from getting a small percentage (5-10%) off all your bookings, to getting a free night or day rental after a certain number of purchases.
5. Utilize credit and charge card rewards.
And pass travel rewards back to employees. Have a chance to upgrade a seat from coach to business class using reward points? Do it, and get your road warrior to their destination happier. There are also cards that give you access to airline lounges or business lounges in cities around the world. These comfortable lounges offer your jet-lagged road warrior a place to work and freshen up all over the world. Plus some cards offer exclusive access to events, impossible-to-get dining reservations, and access to premium concierge service.
Use all the rewards you have to make life easier for your traveling employee (especially amidst cutbacks in other areas).
6. Plan ahead.
Cancelling a trip on last-minute’s notice is not only inconvenient, but it can also be very costly. Airline change fees start around $150, and many hotels will charge for nights canceled within 24 hours of the reservation. If you find that cancellations are eating up even a small amount of your travel budget, it may be time to revaluate the common causes for these travel snags and get them under control via the communication methods mentioned above.
7. Mind your time.
Money can be lost when travel time is not clearly specified. Will your sales team be gone three hours or six? Can they return that night or do they need to stay until the next afternoon? Small decisions can balloon into big expenses. By finding out just how much time the trip really needs to take, you can cut back on time out of the office (and money out of your pocket).
8. Hold fees accountable.
ATM and luggage fees are just two examples of charges that many employees wouldn’t think about incurring if it were on their dime. Be sure to have a clear policy for what will be reimbursed for company travel.
If you decide to exclude certain items, help your employees work around it. For example, by offering packing tips, allowing conference materials to be shipped in advance, or providing a list of locations for fee-free ATM services.
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As a former frequent business traveler, a lot of these comments make good sense. One that I didn't see was to let employees make their own travel reservations. With the ability to use the internet to easily book flights, hotels and rental cars, it makes good sense to let employees do that themselves. There's less confusion, employees can figure out the best schedules that work for them, stay in the hotels with the amenities they desire and, overall, it would probably save time, money and frustration.
There's also the question of reimbursing per diem vs reasonable and actual costs. People will argue that one is better than the other, but I think a lot of it depends on the traveler. Some travelers would prefer to eat and stay cheap while pocketing the extra cash. For them, per diem is the way to go. They see it as the bonus for traveling. Others perfer to enjoy their time on the road and not feel guilty about nicer accomodations or having dessert after dinner. For them, reasonable and actual works better. Our system was reasonable and actual for hotel, lodging, car and a few extra incidental expenses (ATM fees, laundry for trips over a certain length, etc) but per diem for food and others. This seemed to be a good compromise for everyone involved.
Again, speaking as a frequent business traveler, there are some things that can be reimbursed by a company, don't cost a lot and are greatly appreciated by the traveler. Reasonable extra airline fees, like checking a bag; providing reimbursement for laundry if the trip is over five or seven days; ATM fees and similar. They're small and, while I understand they do add up for a company, they're an annoyance for the business traveler who is away from home and having to deal with everything that goes along with that. Taking care of those little extras is a nice touch and helps send the message that the company understands that travel can be a physical and emotional drain on employees and that the people are more important than saving a few bucks.