With the average company spend on travel expenses often reaching up to 12% of the company budget, it’s easy to see why it is so often the first place to start when housekeeping or streamlining expenses. And more often than not, there really are huge savings that can be made – but do it right or it can cost you more than just your budget…
Some years ago I worked for a company where a reasonably large team of us had to travel around the country delivering exhibitions. The expense to the company was enormous, and tracking it all was an accounting nightmare for the administrators. Needless to say, when the company was bought out by a hedge fund, they saw it as a pot of gold to claw back onto dividends.
Their first move was to enforce shared accommodation i.e. we each had to share a hotel room with a colleague. Next was car hire. No matter where your destination, your hire car size was based on the number of occupants. So, as an example, I had to endure an extremely uncomfortable return trip from Kent to Manchester – within the same day – in a tiny Peugeot 106. My backside was still reverberating a week later. There were other restrictions, too, on food and drink etc., all of which caused offence with employees and stress to everyone.
The new owners didn’t see employees as human beings who, actually, didn’t want to be away from home, travelling around the country and shacking up in hotel rooms. They saw travel expenses as an artery haemorrhaging profits from the company, and to a large degree, they were right.
There was a lot of waste and a lot that could’ve been done to make substantial savings – without treating your employees like bandits.
The new owners didn’t need to take this route, which, not surprisingly, cost them some of their best sales people in that first year, there are simpler, more humane and more effective ways to save money.
Here are my top three tips for to costs on employee business travel:
- The biggest savings to be found are in the management and paying of expenses. Use a travel payment company, such as AirPlus whose payment solution will to help control costs. They’ll evaluate your travel activity and provide seamless payment solutions for business travel, which is tailored to the needs of your company and will control over spend.
- Negotiate new rates and contracts with a less expensive hotel chain. Employees would rather have a private room than, say, a 4* over a 3*. Many hotels offer complimentary services such as breakfast or meal deals. Apply the same to airlines and car hire etc.
- Create, develop and communicate a company policy which includes hard-line rules such as employees should travel on the same day whenever possible; last minute travel decisions, which can cost significantly more, need authorisation; hold digital meetings where possible; use the least expensive mode of transport etc. And enforce it to the letter.
These forward thinking changes will save the company a substantial portion of their budget without damaging the morale of its employees.