What is the total cost of business travel?
Calculating the true cost of business travel is harder than you might think.
Of course, working out the total amount of money that has been spent on travel is fairly simple, but that figure doesn’t take into account the time lost whilst in transit or held up with delays, or the loss in productivity caused by jet lag or illnesses that travellers have picked up whilst on their trip.
A more useful way of calculating the true cost of business travel could be to consider the value of the travel compared with its monetary cost. To truly work out the value of a trip you might need to speak to more than just the traveller or their line manager, as there are often more stakeholders involved who may have been inconvenienced by business travel. Here’s a quick list of people to consider:
Traveller - The welfare of frequent business travellers can suffer. This could be through physical ailments at first, often caused by poor quality of sleep and jet lag. However, on a long term basis there are more emotional ramifications due to periods of time spent away from family or travelling at unsociable hours, all whilst trying to fulfil their role.
Human resources - Unsatisfactory working conditions can lead to high staff turnover and it’s worth remembering that every mid to senior member of management that needs to be replaced can cost the equivalent of 50% to 200% of their salary in recruitment cost. High turnover can also lead to more challenging recruitment due to the diminished reputation of an organisation.
Environment - Particularly relevant to organisations who pride themselves on caring for the environment, it’s worth noting that lower cost travel options often contain multiple legs and even multiple forms of transport before reaching the destination, meaning that they’re a drain on the environment as well as the traveller.
Some organisations have implemented well thought-out strategies to reduce their monetary travel spend, as well as avoiding secondary losses of productivity, and they're handily listed below:
Greater flexibility in travel policy - Although giving frequent travellers more flexibility on their travel policy can mean more expense per journey, the opportunity cost of a shorter trip at a more reasonable time can dramatically increase the work-life balance of a traveller.
Giving travellers rest time - Giving travellers time in lieu to rest after a trip, or the opportunity to turn their trip into leisure, are effective ways to improve a traveller’s job satisfaction.
Video calls - Technological advances mean that we no longer have to travel to each and every meeting in order to get some face time with clients; we can easily hook into a video call and avoid taking a hit in productivity.
Meet in the middle - If you really do need to have a face-to-face meeting, but it doesn’t necessarily have to be in the office then why not meet in a fresh environment that’s easy to get to for both parties? For example, if one party is from Edinburgh and the other is in London, meeting in Manchester would be a workable solution for both. Removing yourself from your usual environment can actually boost productivity too!
Use your travel management account managers - If you’re currently using a travel management company, then work with your account manager to build relationships with the stakeholders involved (HR, finance, directors and travellers themselves) to create an improved travel policy and budget. Account managers can also build up relationships with hotels to agree on corporate rates. This can be beneficial to travellers as using a familiar choice of hotels comes with a level of consistency and comfort, both of which can reduce the stressful effects of travelling.
As with a lot of things in life, it’s not just about the money.
There is an increasing push within the business travel industry to put employees and their welfare at the centre of travel management, with organisations taking greater responsibility when it comes to delivering duty of care. When it comes to calculating the true cost of business travel talking to your travellers, rather than scouring your spreadsheets, can prove to be much more helpful.
Have a travel policy that is fit for purpose.
You might already have a travel policy, but is it the best that it can be? Is it a one-size-fits-all document that’s been in place for a long time and therefore it no longer meets your needs? Is it aligned with where your organisation is looking to be in the future? Taking the time to examine your travel policy in a critical way, whilst gathering feedback from those that it affects the most is your first step in crafting a well-constructed, universally understood and adhered to travel policy that will act as your first line of defence when it comes to controlling and reducing travel costs.
Improve your lead times
Increasing how far in advance travel is booked is a behaviour that is key to driving travel costs down, however last minute bookings can be a hard habit to shake due to the amount of flexibility that they afford travellers.
Although it’s not always possible to exert a lot of control over meetings with prospects or clients, internal meetings provide a great opportunity to think smart and increase lead times, so it’s worth asking travellers to be mindful when arranging these. Your travel management company (TMC) should have a wealth of experience when it comes to improving lead times and working with your account manager to develop a strategy that best fits your organisation is the best way to kick things into touch.
Boost travel policy compliance
The first step to improving compliance with your travel policy is to understand why travellers are resistant to booking within the defined parameters set out in the policy; is it a matter of convenience? Is your current booking system difficult to use or access? Does your travel policy seem inflexible or unrealistic to employees? Do employees feel like they have more choice using online booking sites?
Find a travel management approach that’s the right fit
If your organisation’s current approach to travel management isn’t quite working out, or is failing to produce the results that you want then why not find a travel management solution that fits?
Procuring the services of a TMC is no mean feat and, if done properly, it can take a fair amount of time. However, it also provides an often much needed chance to take stock - to evaluate what’s working, what isn’t and where your organisation is heading.
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