Travel Often Part Of Multi-Disciplined Risk Management Approach - Business Travel News

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Travel Often Part Of Multi-Disciplined Risk Management Approach

February 05, 2013 - 10:55 AM ET

By Mary Ann McNulty

The corporate departments most often thought to own corporate risk management policies and processes are security, risk management, human resources and legal, but a recent survey of 125 global companies found that travel management was most frequently identified as the process owner.

[Please click here to view the digital edition of BTN's special research feature on travel risk management, featuring all charted data and downloadable as a pdf.] 

In the Inform Logistics poll conducted in May and June 2012, 35 percent of respondents said their firm's travel departments owned risk management while 30 percent identified security. Another 18 percent indicated HR, 8 percent cited senior management and 9 percent said risk management was outsourced.

"It's a little worrying because people aren't always sure who is in charge of risk management within corporations," said Inform Logistics managing director Ian Flint, addressing attendees at The BTN Group's Travel Management 2013 conference in December. Just under half of respondents to the Inform Logistics survey said their companies have a security department, but 60 percent said a risk management plan is in place.

Hospitality Lawyer founder and president Stephen Barth said a key issue is "that there are very few attorneys in your corporate offices who understand this realm very well. Many think workers' comp covers all this," or that risk management departments should handle all such matters. But issues often must be addressed with policies on workers' comp and employment laws, travel and risk policies and duty-of-care provisions.

Part of the problem, according to conference speakers, is the breadth of risk management initiatives needed to protect assets, whether buildings, offices, intellectual property or people. Traveler tracking could be just one element of a travel program that also might include policies and compliance, training, pre-trip notifications, en route notifications, evacuation services and limits on the number of executives or employees allowed to fly together. Risk management programs also could involve protecting data and ensuring compliance with duty-of-care laws.

Barth encouraged attendees to vet the security of their air, hotel and rental car suppliers, "because all those companies have the same duty to their employees that you do to yours. They all need to be on top of this and should have data for you about safety and security."

Risk Management Dream Team 

Barth asked, "Who needs to be on a corporate enterprise risk management team?"

"Anyone who has passion about the problem," responded iJet founder and CEO Bruce McIndoe. "Travel and security tend to be ones who bind together to make it happen. But they realize that they typically need to bring in HR. Risk, HR, travel and security tend to be the four I see."

PricewaterhouseCoopers security director Daniel Pocus said those four components are involved in his firm's program: "We integrate a lot of the processes, especially international ones in high-risk locations, so we really need to communicate effectively with our people in travel and HR."

In addition, Flint suggested that companies will "need IT as they need to integrate systems and portals."

Pocus said that point is well-taken. "Sometimes we go to places that really are a large intel risk," he acknowledged, adding that PwC's IT department "covers it well to ensure that we have a blanket approach to make sure it all works [with] communications to reach out to people quickly."

'Split-Second Decision' Training 

Once a risk management program is in place, how do organizations inform travelers, their managers and senior executives?

"The biggest challenge we have is to articulate that, to make people really aware of the processes that make it safe for stakeholders," Pocus said. "Of course we address it, especially when people travel to high-risk locations. The idea of awareness is really important."

Barth noted that many companies have started testing employees. "A 10- to 20-question test," for example, may be used to ensure would-be travelers understand policies, he said, allowing managers to say, " 'You're not going anywhere until you demonstrate' " policy and safety knowledge.

PwC has started to train all new hires on the topic. "To get them really early in on the process is extremely important," Pocus said. "We find it needs to be from the bottom up, and [we work] with leadership to make sure they can articulate it down too."

He explained that PwC uses a combination of travel security videos and online and in-person hostile environment and emergency aid training to ensure travelers are aware of risks and the actions they should take.

Despite high return on investment of training initiatives, iJet's McIndoe said training is the risk management component "least spent on" by companies. "This is all about behavior modification. It's about making that split-second decision. The only way you're going to change people's behavior is training, telling them what you want to do and why."

In the Inform Logistics survey, 17 percent of respondents said their firms provided pre-travel risk training and 23 percent said they provided crisis and emergency management team training.

Speakers said it is unclear how companies should deal with employees who decline assistance, won't heed warnings about travel to specific hotspots or turn off their location-based devices.

Policy Shortfalls 

Policy is key to risk management programs, and speakers urged attendees to take a long, hard look at all aspects of theirs. Most often lacking in travel policies, McIndoe said, are components that actually address risk management. "I've been through dozens and dozens of travel policies and can probably count on one hand the number that actually addressed risk management," he said. "They focus on class of service, upgrades and reimbursements. It's all about the expense side of travel. Seldom do I see information about risk management—even simple things like, when I rent a car, should I elect the insurance or not? You would think companies would communicate that."

While companies in North America "regularly update travel policy and keep needs in mind," that isn't often the case elsewhere, according to Flint. "Often when you look outside North America or at a fragmented company, you'll find that they have policies, but they're often outdated," perhaps by a dozen years.

McIndoe illustrated the point with a story about his inability to obtain copies of a business travel accident policy during a recent trip to Asia. He said that after several requests, he learned the policy had expired two years earlier because "the one who had been renewing it left and no one had picked it up."

Traveler Tracking  

Though other aspects of risk management are important, McIndoe acknowledged that as much as 90 percent of most programs are about traveler tracking. He said that itinerary-based tracking solutions "fall apart when an incident occurs as people scatter to the wind and no longer follow their original plan. When it comes to risk management, it continues to be the highest-value data. You want to know before people do something so you can actually mitigate and do something about it.

"People always ask me [about] GPS versus PNR," McIndoe continued, referring to passenger name records. "If you want a risk management program, get the PNR. If you want a disaster response tool, get the GPS."

Itinerary data augmented with a mobile device or location-based tracking is a crucial component, except during such incidents as Hurricane Sandy, "when there's no power, cell phones or means to get a hold of people," he reminded attendees. Those who borrowed phones still may not have known their company's emergency number, just one example of the many "issues at the pointy end of disaster that are tough."

Perhaps that is why 52 percent of respondents to the Inform Logistics survey described their companies' response to major disasters as "reactive," compared with the 34 percent called it "proactive."

This report originally appeared in the Feb. 4, 2013, issue of Business Travel News. 

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