CFO’s Guide to Reducing Team Travel Costs
Picture 10 talented business travellers thrust into a whirlwind of lucrative meetings, ‘networking’ cocktails and ritzy hotel receptions — it’s easy to see how frugal team spending can fall by the wayside.
But effective management of team travel costs begins long before the road warriors head into battle.
Even before the first business-class cashew is consumed, CFOs should have complete confidence that their travelling talent will be positive, productive, and ultimately profitable.
So how can CFOs plan for profit, enforce company policy and avoid overzealous spending, all without sacrificing the comfort or security of their employees?
We explore some tips and techniques to keep the company wallet in-check, capitalise on booking deals, reduce accommodation spend and arm management and travel teams with the technology to succeed.
Take Your Travel Manager Out For Coffee
Travel managers have a tough gig, and CFOs who live by the simplistic request of “reduce our team spend by 20% this trip” don’t make it easier. The travel management profession has seen drastic change in the past 10 years , and the role now demands a flexible, agile and strategic mind.
Strong collaboration between travel managers and CFOs is crucial to making positive changes to corporate travel policy.
The majority of CFOs recognise this, however just 27% of CFOs cite their relationship with travel management to be effective. Committing to meeting regularly with travel managers to discuss industry trends, technological innovations and areas of weakness and opportunity fosters a mutually beneficial relationship.
Once CFOs develop a working understanding of the immense technology at the travel manager’s disposal, they can make informed adjustments to the company’s corporate travel arsenal.
Book Early, Book Smart
It’s generally accepted that booking flights and accommodation early will save you money. Market fluctuations and seasonal influence are two deciding factors in flight prices, and these are largely nullified by an advance purchasing strategy. Again, CFOs should leverage the know-how of travel managers to take advantage of advance bookings.
Thus it’s in the CFO’s best interest to ensure travel management has all the necessary resources at their disposal so they may pull the trigger on an advance booking. CFOs should be prepared to take a back seat in what is becoming a highly specialised and technical profession, assuming a facilitation role.
But facilitating travel managers goes beyond seeking advice and insight; CFOs who are serious about optimising their business travel program will recognise the innumerable benefits of a streamlined travel management platform.
In a volatile buying environment, where significant savings present themselves and disappear in a matter of hours, an advanced corporate travel platform is vital.
Reducing Flight Costs
So you’ve devoted time and budget to your dutiful travel managers, and with the assistance of top-of-the-line management software they’ve identified the optimal time to book flights. But before they do so, you encourage them to go with economy tickets.
While CFOs who book economy seats for their business travellers will save significantly, consider the message they send to their employees and their longer-term productivity.
A redeye slog from Sydney to Los Angeles, set to the tune of the persistent screams of children behind you isn’t conducive to 9am meetings the following day. On the other hand, forking out for business class seats on a shorter international or domestic flight may not be worthwhile.
Travel management should engage travel teams in policy conversations and team building regularly prior to their departure.
These should be an opportunity to explain inconveniences (like long economy flights, for example) with honesty and understanding. CFOs should join in these discussions, and explain the rationale behind the budgeting of the trip and the corporate travel policy at large.
CFOs should lead by example, adhering to the corporate travel policy as closely as they’d like their road warriors to.
Finding a middle ground, like premium economy seating, or re-allocating savings in alternative areas like accommodation or social allowances are other incentivising methods for encouraging frugal team spending.
Travel managers will also understand the ins and outs of rewards systems and loyalty programs, which they can take advantage of through their management platforms.
Reducing The Size Of Your Team
CFOs may be urged to slice and dice the size of their travel team when they see ballooning costs. However, any consolidation should be done carefully. There are a few pros and cons to consider when reducing the size of your team:
- Savings to be made at all stages of the business trip, from the airport to accommodation and everything in between.
- These savings can be allocated to other team members, to ensure their comfort with perks like business class tickets.
- Reducing the size of your team reduces the chance for friction and frayed relationships.
- Monitoring the spending and safety of overseas employees can be intensive without a streamlined management platform, but is markedly easier with a smaller team.
- Keeping the workload the same while reducing the number of workers is an age-old recipe for stress. Before consolidating the size of their team, CFOs must be confident that their travellers can complete the work comfortably and at their best.
- Fewer staff mean fewer networking opportunities. Some of the most profitable conversations for business travellers can occur behind the snooker table, or with a glass of wine in hand.
- Reducing the size of a travel team sets a precedent for future trips, which may not be sustainable. Just because a particular crop of employees succeeded with fewer colleagues, does not mean future teams will be so lucky. For a travel program optimised for profit and productivity, CFOs and travel managers must treat each team as a unique entity with unique challenges and opportunities.
Reducing The Duration Of The Business Trip
Much like when consolidating the size of a travel team, CFOs and travel managers should think carefully before shaving a day off the proposed itinerary.
Let’s explore a hypothetical:
Team A have a 5-day business trip. They have a meeting on the final day of their trip, and to save a night’s accommodation spend, they are flying home immediately afterwards. They arrive home after 9pm, and are expected to attend a debriefing session at work the following morning.
Even with the luxury of business class seats, a few team members call in sick and miss the meeting, citing exhaustion. Those who do attend are unproductive and unmotivated by the demanding schedule.
Alternatively, let’s consider Team B. They too have a 5-day business trip, with a meeting on the final day. However, unlike Team A, they’ve booked an extra night’s accommodation to recuperate, flying home the following day.
They arrive in the afternoon, and all check into work energised and refreshed at the debriefing session the following morning.
CFOs who are well-versed in business travel know the importance of cashing in on their employees’ new connections, innovative ideas and enthusiasm right away. Rewarding their road warriors with an extra night’s accommodation to unwind before attending work at home base is a sure-fire way to boost morale and capitalise on rejuvenated employees.
Travel managers with a sophisticated corporate travel management platform at their fingertips will often be able to facilitate this luxury by locating savings elsewhere in the itinerary.
Alternative Accommodation Options
For example, when registered for AirBnB Business, you’re able to charge the trip to your company account. This service also offers a selection of hosts who have upgraded their lodging with higher quality amenities, specifically catering to business travellers.
Arm Them With The Basics
By now, through involved collaboration with travel management and travel teams — and leveraging the cost-saving prowess of a management platform — CFOs should have a sound strategy for reducing team travel costs.
With the assistance of all involved, they can encourage employees to take the reigns themselves. There are numerous smartphone applications that encourage productivity and savings. A few of the essentials for business travel include:
WiFi, essential to corporate travel?! Who knew! However, The Business Traveller Connectivity Index Report revealed the average daily data use of business travellers was 759.45 MB.
If these megabytes come from anything but complimentary WiFi, especially international roaming, they can prove costly.
Tripit allows travellers to access real-time updates on security wait times, flight delays, gate changes and adjustments in layover time. The “Amenity” list also provides users with detailed reference points of the nearest amenities within the airport.
While simple solutions like these may seem insignificant, they all do their bit in reducing the chance of a missed flight and missed first meeting.
Uber for Business is a ride management platform. Using their service can reportedly save $1000 per employee per year. They offer customisable time, location, and expense code policies, so travellers can insert their pick-up location, select an Uber Class (UberX, UberTAXI and UberBLACK) that matches your policy and have it charged to your business account.
Virtual payment can considerably reduce overspending by controlling allowances. These virtual cards function like a credit card but have added functionality. The expiration date is specified, and once the card expires, the booking data is automatically reconciled. No further charges can be thereafter.
Create A Destination Travel Itinerary
Travel managers know that positive employees are productive employees. CFOs who see apparently frivolous spending on social allowances, accommodation upgrades and ‘destination’ type considerations may be inclined to close the coffers.
However, travel management software has allowed the personalisation of itineraries to promote the most profitable use of your road warrior’s time.
Travel managers need to educate CFOs on the benefits of both management software and personalised business travel — so a collaborative and united corporate policy can develop.
By the same token, to succeed in cutting team travel costs, CFOs must be receptive to the innovative tools at their travel manager’s disposal. Travel management is an agile and evolving industry, and one that demands attention by all levels of company leadership.
Original post can be found on locomote.com