An SME Travel Policy That Has Teeth

Want a travel policy that has some power behind it? Keep it simple, said Partnership Travel Consulting CEO Andy Menkes. He said to focus on three things: Require travelers to use the company's approved form of payment, which is usually a corporate card; to book through the approved online booking tool or the travel management company of record; and to book preferred airlines and hotels. They should fly on the airlines that offer the company the best discounts, the lowest logical airfare, he said. "Logical being: You don't take two connecting flights to save $80 when a nonstop will get you there." Similarly, for hotels, the policy should require travelers to book approved hotels at the negotiated rate in those cities where the company has negotiated rates.

If employees comply with this simplest version of a policy, Menkes said, a company instituting a policy for the first time will save 20 to 30 percent.

All those requirements add up to a mandated policy, though, and not everyone agrees that's a good thing. "I've always heard that mandate is a four-letter word," said Menkes. "Here's the answer I give: Does your company allow employees to go out and buy their own office furniture and then submit an expense report for a desk and chairs or whatever? I doubt it. Can an employee go into Best Buy, pick out a laptop of his or her choosing bring it in and say to IT, 'Here, you configure it,' and then say to their boss, 'I need to be reimbursed for the laptop I just bought.' [Well], the average expense report costs more than a chair, a desk or a laptop."

However, there are times when a mandate simply won't work. If the company's goal is to cut costs, "then it shouldn't be a hard sell with senior managers to get them to buy into this," Dart Container travel services manager Cheryl Benjamin said. And backing from senior management is what turns approved booking channels and preferred suppliers into enforceable policy. On the other hand, if senior management's take is simply, "We want our travelers to be happy," then perhaps the travel manager should issue guidelines instead of policy.

Sykes director of global finance and travel services Al Mazzola echoed the need for support from management when instituting a policy, but he also said travel managers need support from HR. "If [travelers] try to overstep you and they're successful, they will continue to do so," he said. "And the news will spread like wildfire. So you need their support." If you don't have it, start documenting your successes. Then "bring the ammunition out … and say, 'I can only achieve this cost savings or stay within budget because of these rules that have been set in place. These numbers don't magically happen. There's work behind them.' Ritchie Bros. Auctioneers travel administration manager Michelle Grant offers as an example, "If decreasing the average ticket price is your goal, identify how you are going to achieve that, communicate the goal and report on it."

Mandated programs are more common among SMEs, Mazzola said, thanks to smaller companies' stricter budgets, but "if you show them that you are fair, mandating a policy becomes much much easier." Grant added, "It is just as important to share the results with the traveler so they understand how their behavior can have an impact on the bottom line."

Beyond cost savings, though, she said, "traveler safety and security should be the No. 1 reason you want compliance to your policy. To that end, a company could push or require travelers to use an approved booking channel but be more lax about booking with preferred suppliers.

Meanwhile, consider that a mandate can, in fact, make travelers' lives easier by limiting choice. According to Menkes, "If you say to the travelers, 'Hey, book what you want, fly whom you want, stay where you want, just do the right thing,' … even if the employees in fact went out of their way to book the lowest airfare and book the right hotel, they are wasting company time by trying to figure this stuff out."