According to an Oxford Economics USA report, the return on investment of corporate travel is anywhere between $10 and $14.99 per dollar invested. Today’s business leaders understand the profitability of staff travel and its critical function in relationship building, networking and partnerships.
However, C-Suite employees can easily become disconnected to the mechanics of their corporate travel policy, how their business is approaching travel management, and the way their staff wish to travel. This is reflected in the fact that 27% of CFOs believe their relationship with Travel Managers is ineffective.
For larger companies in particular, business travel management is often a function left to specialised employees like Travel Managers and human resources.
However, the most profitable corporate travel policies are those with influence from the top.
Below we outline 3 staff travel management tips for C-Suite employees, from cost control strategies to investment in technology.
1. Senior Leadership Should Be Active in Business Travel Management
As mentioned, C-Suite employees can find themselves with diminishing involvement in business travel management, which is one of the reasons that travel budgets are a primary target for cost cutting. However, leadership staff who neglect any influence on their business’ corporate travel policy expose themselves to a number of risks.
A study by McKinsey & Company found that the influence of senior management is essential in business travel management, especially so in implementing cost control measures:
“The support of top executives is necessary for cost-management efforts to succeed. if a company announces a new travel policy, senior managers need to set the tone with their own actions.”
C-Suite employees shouldn’t only be active in implementing corporate travel policy changes - they should also be active in designing them.
2. CFOs and Reducing Staff Travel Expenses
The only relationship time-poor CFOs have with business travel management is often a review of its impact on the bottom line. However, CFOs who play an active role in designing corporate travel policy can reduce costs, increase compliance and drive the ROI of staff travel.
Employee overspending can constitute as much as one-third of a business’ overall travel and expense budget. Strategic CFOs are those who address overspending at the source - taking into account the cultural, technological and personal causes of noncompliance with corporate travel policy.
For example, some industry commentators believe that employee overspending goes hand-in-hand with business travel management. Others believe that the best way to incentivise compliance with corporate travel policy is to offer financial rewards and incentives. Many more believe the best way to tackle employee overspending is to implement more stringent corporate travel policies and penalise noncompliance. It should be the responsibility of the CFO to identify the root cause of employee overspending and to offer strategic and data-driven improvements to corporate travel policy.
3. Senior Management Should Invest in Corporate Travel Management Software
Research conducted by the Australian Communications and Media Authority found that many Australian businesses are choosing to be late adopters of digital communications, despite being aware of its importance. A lack of trust, confidence and aversion to risk are cited as major drivers of this strategic position.
However, leveraging technology is essential in business travel management. According to CFO research, a disjointed approval, reimbursement and payment process is one of the main causes of overblown travel and expense costs. Take into account the many other arms of corporate travel management, like risk management, communications, analysis and booking, and a streamlined staff travel platform becomes essential.
To see how the Travelport Locomote business travel management platform will change the way your staff travel, get a product demo below: