Reduce your travel costs through compliancy
Business travel can be a high cost for an organization. What knobs can you turn to realize savings without missing the purpose of business travel? In this article, we zoom in on compliance.
Failure to comply with a travel policy costs organizations tons of money. If travelers were to adhere to travel arrangements 5% more, that already saves as much as 10% of total travel costs. In short, increasing compliance is a very interesting way to get a better grip on travel costs. But why don’t travelers adhere to the policy and what can you do to make it happen?
Why not compliant?
The top reasons why travel is not booked in compliance with policy are:
- Last-minute bookings (78%)
- Traveler is unfamiliar with the policy or unaware of the consequences (69%)
- Traveler uses personal loyalty programs (54%)
In addition to these three main arguments, another factor is that travelers are sometimes dissatisfied with the reimbursement they receive for travel expenses. Whatever argument is used, communication and education are essential elements to ensure better compliance with travel policies.
Increase compliancy with communication
What happens the moment a traveler is not compliant? Will action be taken? Is the traveler penalized? Research shows that almost half of travelers think that nothing at all will happen if one does not comply with the policy. It is therefore important to always communicate with travelers when they are not compliant (and what the consequences are), but also when they are just fine with the rules. For example, encourage travelers to report when they experience compliance issues during a trip. For example, consider car rental companies that offer a more expensive car at the counter than reserved. Such situations can be incorporated into booking systems.
To actively involve travelers in compliancy, however, as an organization you must appoint someone to manage this. For example, appoint someone as Compliance Coordinator and give him or her the task of sparring with travelers on this topic and to investigate in the background how compliant employees are.
Check trips before it’s too late
For many companies, non-compliance is not discovered until after the trip has already taken place. In the financial processing of the trip, processing claims or in monthly reports, the costs suddenly surface. To ensure that trips are organized according to policy, it is important to check requested trips earlier. Therefore, build into the booking process control moments when authorized employees, the Compliance Coordinator or a Travel Management Company check if the trip is booked according to the policy. These “pre-trip approvals” are an important checkpoint to keep travel costs in check.
Reward loyal travelers
A sensitive issue to promote compliancy is rewarding travelers if they adhere to the policy. Many organizations are not eager to reward employees if they comply, but it works.
Rewarding travelers can be done in a variety of ways. Set up a loyalty program where travelers earn points if they comply with the policy. Add a game element by showing which travelers saved the most money. Or give travelers discounts on travel-related products. Whatever option you choose, rewarding travelers works to make them more aware of the need for compliance.
From baby boomer to millennial
A final point that will certainly become important in the coming years is the difference in generations. Baby boomers use different means of communication and have different needs and requirements while traveling for business than millennials. It is good to take into account the differences in these groups in travel policy. Different choices will also need to be made in promoting compliancy, depending on the generation.
Save costs through compliancy
As mentioned above, significant costs can be saved if travelers are compliant. Business travel costs can be reduced by:
- Communicating more with travelers;
- Checking travel in advance;
- Reviewing travel after the fact and adjusting policies where necessary;
- Rewarding good traveler behavior.
Would you like to learn more about how to manage compliance or are you looking for advice on your business travel policy? Then please contact us.