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Good Travel Policy Development

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Here we uncover the importance of why good travel policy in place can decrease the cost of corporate travel across your organisation in the area of least 20% per annum, and make your business a business people choose to work for above others.

When we first meet with a potential new client an important part of the conversation will go a little like this;

“Tell me about your travel policy?”

Some clients will say something like, “Oh we ONLY travel Qantas”, thinking this equates to a Corporate travel policy.

However, most time the answer is, “Travel Policy? We don’t have a travel policy in place, everyone just books whatever they like.”

The question that follows will be, “Ok, so what would your estimated annual spend be on Travel & Entertainment?”

“I think about $XXXk.”, inevitably comes the answer.

In short – because they don’t have a travel policy in place, they may be keeping a good track of expenditure – they don’t really know. It’s a definite guestimate.

Now, whatever their answer is, I can more often than not state confidently that whatever the amount is they currently spend would be considerably less, if a clear and robust travel policy was in place for their travellers.

This is because no matter what an organisation’s travel spend is, it’s imperative that in order to cut travel costs there needs to be some parameters placed around what services travellers are permitted to book; taking advantage of best fare of the day, what the maximum spend is per night in a hotel (room only or all inclusive of breakfast etc), what car company or car type is allowed to be booked, and what class of travel is allowed in regards to long haul and short haul flights.

In helping business maximise their travel spend, if a Travel Policy is developed, implemented and adhered to, many times cost savings per annum can be in the realm of 20% and above.

Now that’s pretty significant – whatever business you’re in.

And there is another interesting point that companies could think about when creating Travel Policy – and that is creating a Travel Policy that positions your organisation as an ‘Employer of Choice”; an organisation people choose to work for above all others.

While many organisation’s may think that a travel policy is primarily a tool to set rules for travel expenditure and processes, those that sensitively balance their financial goals with the personal comfort and needs of their most frequent and senior business travellers can potentially, save money in the long term by allowing employees to integrate their work and personal lives.

The creation of a Travel Policy that allows employees to take advantage of aspects such as travel during work hours and time in lieu for weekend travel etc can make for very happy employees! A travel policy that considers its traveller’s needs while on the road can mitigate the risk of unhappy travellers, lower productivity, high staff turnover and the resultant increased costs for staff recruitment.

When considering a good travel policy that is designed to both make you an employer of choice AND result in increased cost savings, here are just a few areas that should be taken into account.

Air travel

Which airlines will you allow travel on, and which ones you won’t. Will you allow flexi-fare option or only fares that are non-changeable depending on the nature of the trip.
What unbundled extras such as preferred seating, in-flight meals, airport snacks, in-flight wi-fi and airport car parking, is the organisation willing to pay for – and which ones do employees pay for?

Accommodation

When creating policy around accomodation type, consider aspects that directly impact travellers such as location, street/external noise, comfort, safety features, amenities and facilities.
If there is a hotel that is close to where meetings are held – they might be slightly more expensive. However there is the added benefit of savings on taxi fares.

Also – many employees who travel frequently for long periods of time like to maintain some sort of health and leisure routine. So, will you allow your employees to take advantage of a slightly more expensive hotel with gym or pool amenities at the organisation’s expense?

Out of pocket expenses

So travellers can be fully aware of what allowances they have and avoid unexpected costs, it is important to be clear on what incidental expenses will be covered and which won’t.
As eating on the road can be expensive and sometimes work days don’t often finish until after 10pm, in room service may be the only option – so ensure your meal allowances are practical and take these important issues into account.

Also be clear on how travel is to be paid for. Some staff members may not have credit cards in place to pay for travel in advance before being reimbursed. However, if paying for travel up front is going to be part of your policy, staff should be aware they may have to temporarily absorb the cost of certain items while they are travelling.

So to wrap up, the development of a sound travel policy that takes into account the needs of the organisation and marries them with employee expectations can help your organisation reap rewards on many levels, including:

• Cost containment
• Travel data visibility
• Happy travelling employees who are more productive
• Satisfied employees equate to higher office morale, reduced staff turnover and recruitment costs
• Employees are more willing to travel, which supports business growth

If you are unsure of how to create a policy that ticks the right boxes, contact our Corporate Travel Team on corporate@fbitravel.com.au or call +61 3 8573 0900 for a chat.

 

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