Corporate travel and expense (T&E) programs represent the second largest line of expenditure after payroll for many businesses worldwide. Despite this, calculating the return on this investment does remain a challenge. Almost all corporations have a centralized T&E program. However, recent research by the London School of Economics (LSE) for the report Managing Every Mile: how to deliver greater return on invest from travel and expense revealed an overwhelming propensity for travelers to go ‘out of policy’ when making their booking; and a company tolerance towards this practice.
Research in the report indicated that 95% of companies permit travelers to engage in T&E outside of the program.
This presents a number of challenges. Not only is it very difficult for corporations to then monitor spend on corporate travel, or for travel management company (TMC) partners to service those travelers, it also means delivering proper duty of care during trips becomes complex. This makes it difficult, if not impossible, to take a strategic approach to corporate travel and ensure the most is being made of the investment.
Why are so many travelers bypassing the T&E programs put in place by their organization? Trust, simplicity and flexibility are the key drivers. The digital workforce of today has become accustomed to self-servicing with simple, straight-forward processes when it comes to booking travel. If the corporate booking tool is clunky or not responsive, there is a tendency to log-in to a familiar mobile app, book a convenient ticket and charge the expense back later, especially when corporate cards are not mandated by a corporation.
This leads to the question on how to keep travelers engaged, within program and safe?
Creating an engaging program
The key to a strong managed T&E program is making travelers feel part of it. In the LSE report five key stages are identified, all of which have the potential for optimization and increased engagement:
- T&E strategic sourcing
- T&E booking
- Traveler support and duty of care
- Expense management
- Analytics and feedback
The first thing corporations should do when analyzing their T&E programs is to decide what ROI actually means for them, at each of these stages. Rather than just focusing on ROI in the monetary sense; organizations should evaluate their strategic goals and see if these are being met by the program.
For instance, the main focus for the CFO of a business is likely to be in cost containment. In which case, automating expense reporting so that they can be scanned and sent through a mobile application will help achieve this.
However, the HR department will have different priorities. It may be that the HR team needs to enhance its offering to secure the best talent, offering a flexible and exciting corporate travel program on the right technology solution adapted to a digital, flexible and mobile workforce.
One area which stands out and is common to all corporations, is that duty of care is a priority not only to HR professionals, but, in fact, across the executive board. Research from the report indicates that for 70% of respondents, employee duty of care has a greater focus in their organization than in the past. Corporations who walk the talk will be thinking about how to manage clear communication before and during a trip via automated travel alerts before departure, supported by technology and a vast range of content adapted to the in-trip experience. The net result of this is better control through management of the ROI at this stage of the process.
Ultimately, by ensuring that an effective T&E program is in place, and making sure employees adopt it, businesses can stand to gain 25% more return on investment on business travel. Understanding what is important to the traveler is key to keeping staff engaged. Companies that align their programs with their strategic goals will reap the benefits from their corporate travel program objectives. There is no one size fits all, but a structured approach that fully aligns with an organizations’ needs is key to unlocking return from travel spend.
Originally published on the Amadeus corporate blog.