Is your T&E policy too restrictive?
T&E policies have long been identified as a necessity; but how strict should your policy be?
A recent article on accountingweb.co.uk revealed the granular detail of the Vodafone T&E policy (12 pages!), causing much debate and controversy. When companies issue such a restrictive policy is it to the detriment of happy, productive employees? And does it backfire causing travellers to become rogue, booking outside of policy negating any benefits from implementing a T&E policy in the first place?
There’s no single style of T&E management that would be right for every organisation, but no matter whether a company’s travel policy is generous or thrifty, informal or strictly enforced, we do know it has a real effect on the employee experience. What’s more T&E is becoming an important aspect of the recruitment package with potential candidates (50%) looking at employer’s travel program and policy as an important factor before deciding on a new job. The way employees travel and entertain says a lot about your organisation’s values.
From a corporate perspective T&E policy is required to manage corporate travel and ensure duty of care for employees; streamline the booking, payment and reimbursements, and drive cost savings.
T&E is typically the second or third largest controllable expense category, behind payroll and rent. It has a material impact on a business’ bottom line and is therefore high on the corporate agenda. How exacting your policy is often influenced by the size of your organisation; many large corporates requiring detailed reporting and visibility of expenses whilst in smaller companies’ rules can be more relaxed as the human element is easier to manage.
So what should your T&E policy look like?
Your policy should include guidelines for employees to follow, not extra hoops for them to jump through. Tighter rules can reduce instances of overspending, but they can also burden employees by forcing them to spend more time planning their meetings and business travel. At a minimum your policy should cover the basic – where, what, and when of T&E.
It is also worth remembering that it is notoriously difficult to enforce T&E policies. If your top salesman overspends slightly, it is often hard to stick to exacting rules when they’re bringing in millions in revenue!
The ultimate goal is balancing a frictionless travel policy with enough guidelines to manage cost savings whilst ensuring minimal work and stress to employees. Implementing a simple, traveller- centric T&E program will go a long way in boosting employee well-being and job satisfaction.
So, is the clearly defined Vodafone T&E policy the only way to control your costs? We looked at some alternatives :
Google created the template for modern travel management with its Trips program. Google employees get a budget before every one of their business trips, and if they come in under budget, they earn credits to redeem on future travel upgrades. Googlers are motivated to save today so they can splurge tomorrow.
Rocketrip is another example. Employees get custom trip budgets based on available rates and the parameters of their company’s travel policy. In addition to this data-based estimate of what their trips should cost, employees also get a real incentive to spend less, because they keep half of the savings they generate when they beat their budgets. It’s a win-win.
Its seems when employees have a material incentive to use low-cost options, they start spending as carefully on their business travel as they would on their personal travel.
So maybe we need to be thinking of T&E as a team effort rather than a potential source of conflict, encouraging savings as part of the organizational culture but balancing this with the convenience and comfort of the employee.