Effective Corporate Travel Policies
It’s a myth that employees traveling on business are frustrated by corporate travel policies. In reality, employees want to know what’s expected of them and how to comply with company policies, as long as those policies are fair and allow them to do what they need to do while traveling. Therefore, a well-thought-out corporate travel policy will benefit both the company and the business traveler.
If you’re tasked with developing a corporate travel policy, your mission, from a company perspective, is to develop a policy that standardizes business expenses, eliminates waste and overspending on travel, and establishes some controls around that portion of business expenses. Therefore, there are several specific focus areas you should include in a stated corporate policy, including…
Reservations. Companies can use travel agents to find the best deals for the company. The best rates can be identified and utilized, but only by ensuring the business traveler’s needs and the business purpose of the trip are met. Requiring employees to use a corporate travel agent is not unfair, and it makes it clear to employees how to handle the situation.
Credit Usage. Establishing a company credit card that employees traveling on business must use does require effort and expense. However, by linking expenses to a company account, you can track most of your employees’ business expenses. Many travel expenses, such as airfare and hotel rooms, can be directly charged back to the company, reducing the burden on employees traveling on business.
Travel Rewards. If your company’s business travel is coordinated by an internal or external travel agency, a company account with a major airline can be established so the company can accumulate frequent flyer points. The company can then redeem those points and receive these benefits as significant discounts to apply to the travel budget.
Per diem. Your company’s business travel policy should clearly communicate to employees traveling on business their limits for hotels, car rentals, and meals during the trip. You want to prevent this before employees start overspending. This section of the policy should be reviewed annually to update current costs.
Reporting. One of the main employee complaints about company business travel policies is that the expense reporting system is complicated and difficult to complete. You should provide a standardized form for employees to complete for every employee traveling on business to receive travel reimbursement. However, review this form and even design your own so that the format is easy to understand and you have categories to cover all types of expenses employees might encounter.
In addition to these general categories, your company’s business travel policy should include some allowances for employees facing extraordinary circumstances. Room and board costs can vary significantly depending on where employees need to travel. So, you don’t want to set a hotel limit of $125 per night because it’s reasonable to stay at a comfortable hotel for that price in Lincoln, Nebraska, but impose the same limit for employees who need to conduct business in New York City.
By creating a policy that generally protects the company’s budget but can also be implemented by employees focused on company business, you’ll have a tool that serves the interests of both the company and employees and allows business travel to be what it was always intended to be—a productive activity focused on business and achieving company goals.