Dr Alexander Grous, LSE

It very difficult for corporations to then monitor spend on corporate travel, according to Dr Alexander Grous of the Department of Media and Communications at LSE.

Corporate travel is vital to most businesses. Whether travelling to meet with clients; to share ideas with international colleagues; or to attend conferences and network with peers, most executives need to get out of the office and make connections. While video-conferencing can address some of these trips, there is recognition that face to face is still vital to connect people. After payroll, corporate travel and expense (T&E) programmes represent the second largest line of expenditure for many businesses worldwide. Despite this, calculating the return on this investment does remain a challenge.

Out of programme; out of sight

Almost all corporations have a centralised T&E programme. However, recent research by the London School of Economics (LSE) for the ‘Managing Every Mile: how to deliver greater return on invest from travel and expense’ report revealed an overwhelming propensity for travellers to go ‘out of policy’ when making their booking and a company tolerance towards this practise.

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 Companies (TMC) partners to service those travellers, it also means delivering proper duty of care on-trip becomes challenging, as we lose track of travellers on the road. 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 travellers bypassing the T&E programmes put in place by their organisation? Simplicity and flexibility are both key drivers. The digital workforce of today has become accustomed to simple, straight-forward processes when it comes to booking their travel. If the corporate booking tool is clunky and outdated, they would much prefer to log-in to a familiar mobile app, book a convenient ticket and charge the expense back later. Those same travellers are also less interested in being tied to one office location, thanks to the fact that technology has made working remotely much easier and many corporate travel programmes only allow trips made to and from the office itself.

Coupled with this, research in the report indicated that 95% of companies permit travellers to engage in T&E outside of the programme. This leads to the question on how to keep travellers engaged, in program and safe?

Creating an engaging programme

The key to a strong managed T&E programme is travellers need to feel part of it. In the LSE report, we identify five key stages, all of which have the potential for optimisation and increased engagement:

  1. T&E strategic sourcing
  2. T&E booking
  3. Traveller support and duty of care
  4. Expense management
  5. Analytics and feedback

 

The first thing corporations should do when analysing their T&E programmes is to decide what ROI actually means for them, at each of these stages. Rather than just focusing on ROI in the monetary sense; organisations should evaluate their strategic goals and see if these are being met by the programme.

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 programme on the right technology solution to achieve this.

One area which stands out and common to all corporations is the research from the report which indicates that duty of care is a priority not only to HR professionals, but, in fact, across the executive board. The research found that for 70% of respondents, employee duty of care has a greater focus in their organisation than in the past. Corporations may be able to offer better care to their employees while they are on trip achieved with clear communication delivered through automated travel alerts before departure for high-risk countries, with technology adapted to the in-trip experience, and the right content sourced to offer alternatives. The net result of this is better control on the ROI at this stage of the process.

Ultimately, ensuring that an effective T&E programme is in place, and making sure employees adopt it, businesses can stand to gain 25% more return on investment. Understanding what is important to the traveller is key to keeping staff happy and engaged, and companies should align their programmes with their strategic goals to get the most out of any corporate travel trip. There is no one size fits all, but a structured approach that fully aligns with an organisations’ needs is key to unlocking return from travel spend.

Dr Alexander Grous, Lecturer in the Department of Media and Communications at The London School of Economics and Political Science (LSE)