Editors’ note: Thanks for being a part of the Concertiv family for the past decade. Today, we’re happy to announce our growing thought leadership program, bringing you even more executive points of view and insights to help you manage your evolving strategies for spend and procurement management.
Today, we’re thrilled to launch (…drumroll please) our first eBook on one of the most central questions facing leaders today: To send the (whole) team back on the road, or not to send the team back on the road. Here’s an excerpt from the new Guide, which you can download in its entirety below.
Business Travel in 2022
Business travel strategy in 2022 is rife with a host of competing challenges including compressed balance sheets, talent scarcity, and a new hunger to get back on the road.
Your travel and expense (T&E) strategy sits smack at the intersection of these macro challenges.
For many Leadership and Operations teams, today’s travel decisions can feel like an impossible balance between the need for Sales and other client-facing teams to get back “out there” to hit growth targets, versus the bottom-line health and improved cash positions their Covid-era operational cuts created -- especially with recent uncertainty around rising inflation and the threat of an economic contraction.
Best-In-Class T&E Policy: Have One
Business travel is creeping back, but how reluctant are CFOs to give up the boon of a reduced opex budget to send road warriors back out on planes?
We all understand that minding the balance sheet is what keeps CFO’s up at night. But as we discussed above, beyond limiting unnecessary expense, an effective T&E policy gives employees clear directions on how they partner with Finance to meet policy expectations and can even ultimately improve team productivity.
Which is why it’s somewhat surprising that only about 60% of companies have a formal T&E policy written down.
We get it. A lot of us left big corporate expressly to get away from the litany of TPS reports required to get on an airplane. Further, this is an industry where agility is key, where being first to the relationship or the deal can mean millions of dollars (or more).
Your company policy doesn’t need to be onerous, and you don’t need to suddenly become the expense police. However, beyond preventing fraud and saving money, sometimes aggregating your team’s travel decision-making can significantly benefit the team on the road -- for example giving your team preferred hotel or airline status on select airlines. Your policy might ultimately become a talent attractor!
If you get stuck, there are many great consulting firms out there that can help you with a full range of templates, industry benchmarking, contract negotiation to even complete travel program outsourcing (full disclosure: we’re one).
But trust us: define the policy. It’s better for everyone in the end.
What Leaders Miss: Mistakes to Avoid When Creating T&E Policies
Admittedly, T&E policy isn’t always the most glamorous aspect of Finance or Strategic Operations’ oversight. (Though, arguably, it can be extremely lucrative -- the London times reports Google, Amazon and HSBC, each reported cost-cuts of more than $1 billion due to Covid-19 restrictions like limiting in person travel.)
To ensure broad adoption and minimal pushback, the key is to make your policies easy to find, your portals or partnerships easy to use, and align the service level and partner options with team expectations.
A quick way to stop your fledgling travel policy in its tracks is mismatched expectations. If your equity partners or executives are used to staying at the Mandarin or the Omni chains, and suddenly they’re being asked to stay at a discount chain instead, rather than a 10% reduction in overall expenses, you might end up with a revolt on your hands.
Here are some additional gotchas that even smart organizations often overlook.
1. Leaving your employees out of the rulemaking process
T&E policies will be used by multiple departments, from Sales and Marketing to Partners and Deal Teams. Smart organizational change management (OCM) strategies would suggest looping in decision-makers and power travelers from all relevant groups up front, before simply rolling out new rules.
First, it’s human nature to want to understand the “why” for any new rule. Further, these influencers will be able to clearly anticipate any complications that can come from reporting and reimbursement policies. Their knowledge and input will save you time and (hopefully) help avoid the aforementioned revolts if policies degrade your overall employee experience.
Of course, your travel consumers are not the only important internal constituent. Reimbursement policies need to be vetted by both Compliance and Finance if HR or Strategic Operations is leading the T&E charge.
This vetting process will also help you walk the tightrope of employee wishes and financial goals. You don’t want to create policies that effectively shave every penny, but also alienate your best employees and slow down the pace of business.
Similarly, over-accommodating employees by putting them all up at the Four Seasons (without negotiated rates) can jeopardize critical EBITDA targets in an environment when finance is looking at all options to batten down some hatches to weather the macro storms.
While this may be a time-consuming process, it will pay substantial dividends later on through increasing productivity, securing bigger travel discounts, and minimizing expense audits.
2. Too many rules
The goal of your T&E policy is to create a useable strategy to control corporate spending. However, we’ve seen many T&E policies fill a 20-page document, with multiple appendices or subsections.
Ground your policy (and its rollout) in the reality of corporate travel. Very, very few employees will dive into an extended policy treatise with a fine-tooth comb -- which can lead to resentment when they find out that certain expenses are not reimbursable.
Similarly, too many permissions or multiple approval layers can inhibit team agility, and simply annoy your key talent. To ensure real world adherence to your T&E mandates, simplify your policies as much as possible and emphasize any rules your team might not expect.
3. Aged or irrelevant T&E policies
Travel and expense policy best practices change over time as new technologies and services enter the market, along with the rising cost of goods. Policies or price limits set five or ten years ago are likely pretty irrelevant now.
For example, many firms are increasingly leveraging apps like Uber/Lyft and Seamless/Doordash; in addition to leveraging their automation capabilities, many firms are also evolving or aggregating their billing processes, with many of those new vendors sending bills directly to the company or utilizing a single portal rather than having employees submit weekly reports.
Evolve your policies with the times by benchmarking (again) against partnerships and offerings other peer firms are leveraging.
Revisiting your partnership rolodex is also a good time to consider macro updates and new industry entrants, many of whom might be eager to offer additional corporate discounts or support offerings, upping your “cool” factor with your team, while also potentially saving both time and money.
4. Reimbursement woes (unclear policies, or, worse, delayed reimbursements)
In a non-surprise development, employees pay a lot of attention to what goes in and out of their wallets. As such, your employees expect to be reimbursed for travel costs as soon as possible. And they hate delays, unexpected expense report rejections, or any other entropy.
Fortunately, the biggest impediment to someone getting reimbursed is something they can control, namely, receipt submission. Companies can speed up the reimbursement process with online submission software and specified reimbursement windows.
A good T&E rule of thumb is to make your T&E policies simple and flexible enough to deal with the reality of last-minute business hiccups, leverage insights, deals and partnerships to push at pricing wherever possible, and consider the holistic employee experience at every level of T&E development.
Get the Insiders’ Guide to Travel: 2022 Edition Here
We know that business travel is surging back, but how reluctant are CFOs to give up the boon of a reduced opex budget to send road warriors back out on planes?
While the final analysis of how corporate travel will evolve beyond 2022 is still a few years away, it’s clear that many leaders are grappling with a host of competing questions around their legacy T&E programs.
What we do know? It’s time to review and revisit what your policies look like today and decide how they will evolve with your team to meet future goals. Which is why we put together our new guide, to help you revisit and evolve your T&E strategy to meet 2022’s new business challenges. The attached report will:
- Explore the nuances of developing a T&E policy for 2022, and beyond
- Share common mistakes to avoid when developing or evolving your T&E policies
- Provide best-practices on your strategy to improve both financial results and employee experiences
If you’re asking yourself one (or more) of these questions, download our newest Insider’s Guide to T&E Policy Do’s and Don’ts for Today’s Travel needs to learn how to overcome 2022’s travel challenges and develop a T&E policy to meet your firm’s future travel needs.