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Corporate Travel Policies: What You Need to Know

By Jeanne Hopkins
Corporate Travel Policies: What You Need to Know


Business people travel for all sorts of reasons -- meetings, events, training conferences, market research, and so on. Sometimes your employees go short distances and sometimes international travel is called for. Establishing corporate travel guidelines ensures business trips are productive for the company, safe and comfortable for employees, and well-aligned with budgetary realities.

What is a travel policy?

A corporate travel policy is the foundation of your travel program. It enables you to go from an ad hoc environment to a deliberate, coordinated, consistent managed travel system. Managed travel is far more strategic and offers multiple benefits for employees as well as your bottom line.

A defined travel and expense policy is something every company needs, whether you have three employees or 3,000, as long as people travel on behalf of the business. Because every company travels differently, your policy will be a unique document in many regards -- custom-tailored to your organization’s travel needs, internal culture, and budget. Sample travel policies can be a tremendous help in crafting one of your own, but ultimately yours will not be just like any other company’s.

What does a good travel policy look like?

  • It looks like your company, because it reflects the types of employees who travel, the work to be done, the destinations, and the frequency required to achieve your business goals. It is a set of guidelines that govern business trip planning, implementation, and follow-up, used by travelers and travel managers for coordination and by accounting and finance personnel for travel-related risk and revenue management.

  • A good policy looks like the future as well as the present. In other words, it is adaptable to remain useful and effective as things inevitably change, within your company and within the world of travel. No company is too small to be organized. You expect to grow. Retro-fitting a travel policy won’t go well, especially if existing employees have always booked whatever and however they want. Instead, establishing policies as soon as possible can serve you well now as well as in the future.

    Besides, without a corporate travel policy in place, you’re flying blind, financially speaking. That is sure to hinder your growth plans. A sell-crafted policy sets you up to thrive by helping control costs and protect precious capital.

  • A good policy looks like better employee retention. Studies have drawn direct correlations between employee experience and turnover. Before they reach the point of actually quitting, their attitude and productivity on the road can start to slip, negatively affecting their quality of work and client/customer relationships. T&E may be one of your company’s biggest line items, but employee turnover is very expensive as well. Yet both travel and turnover are controllable costs. It’s so much easier and cheaper to create travel-friendly policies that nip these problems in the bud.

  • A good policy looks like you’re taking your duty of care seriously. You have a legal obligation to protect employee safety and security when they’re on the road in your name, but proactively addressing what to do in an emergency shows you have their back as well. Your policy is about their welfare, not just saving money.

  • A good policy even looks like fraud protection, something travel managers may not think about but probably keeps your CFO up at night. Without adequate, clear systems in place, it is all too easy for a few employees to cost you dearly by padding travel expenses for reimbursement.

 

What should be included in a travel policy?

  • Air (and possibly rail), accommodations, rental car reservations

  • Single-use ground transportation (taxis, Uber, etc.)

  • Meal and entertainment expenses

  • Personal safety and security of data and work materials

  • Approval requirements and process

  • Preferred air and hotel suppliers

  • Submission of expenses and reimbursement requirements and process

  • Other issues such as acceptance of gifts that may be applicable to your traveling employees

  • A list of incidental or personal expenses not eligible for reimbursement

The most effective travel policy is comprehensive in scope, but not weighed down with extraneous detail. No one wants to (or is willing to) wade through a sea of fine print to find the answer to their booking question. Your people are busy. They’ll just handle it in the most expeditious way, regardless of what your policy mandates.

The goal of your travel policy, then, is to explain what is expected of travelers and what travelers can expect in return from travel managers and finance or other departments involved. And to make it as easy as possible to do what is expected. Most companies also outline the consequences of not following the rules. Knowing there will be consequences reinforces the fact that your company is serious about policy compliance.

Booking parameters and processes are critical because they represent the bulk of your T&E spend. Large corporations often have an entire department staffed with travel planners who can handle details on behalf of employees. Or they rely on an outsourced corporate travel agency. Smaller and mid-size companies don’t usually have the resources for that, so an in-house travel manager, someone in HR, or even an Executive Assistant are likely responsible for coordinating your travel program.

Having an official travel policy in place paves the way for budget friendly and organized travel, no matter what travel management resources your company has. It gets every employee on the same page, which is also the reason SMBs have turned to comprehensive digital travel management tools that can simplify and streamline travel-related activities while seamlessly including everyone involved. When you take the confusion, manual labor and other time-wasters out of the travel process, travelers can book their own trips quickly and automatically within company guidelines.

A good travel policy controls costs by ensuring employees have positive travel experiences. As Skift’s Andrew Scheivachman puts it, you can force someone to book a money-saving flight, “but if that person emerges from the plane too tired to work, or ends up burned out on corporate travel, it’s not worth the trade-off. . . Experiences matter. You’re not just looking at the dollars, you’re empowering your employees to do a good job.”

Important elements of a travel policy

You don’t want everyone running amok booking and spending as they wish, but you also don’t want corporate travel policies that are so restrictive they make travelers feel overly controlled and result in poor travel experiences.

Include the essentials: what, when, and how

Booking process. Who is responsible for booking travel (individual traveler, travel manager/EA, outside travel agency)? Is there an online booking tool (company travel management platform) to use? What are your advance booking requirements? Give travelers enough room to make individual choices without violating policy parameters. That way they won’t feel unnecessarily restricted and will be more willing to choose in-policy bookings.

Preferred suppliers. If you have negotiated special discounted rates and/or amenities or privileges, be sure to identify them.

Air. Explain acceptable flights (non-stop vs. multi-leg itineraries with layovers). If you have preferred airlines, specify that travelers should book with them whenever possible. Explain what seating classes are allowed, and under what circumstances – companies typically require coach for shorter flights but allow business class for longer flights. Economy seats are never a bargain, because the add-on costs and overall hassles make them far more trouble than the savings are worth. Will you pay for baggage fees, fees for in-flight meals or entertainment or Wi-Fi, etc.?

Lodging. To control hotel costs, you can cap spending with maximum star ratings or nightly rates, but remember that room rates vary tremendously by location and season. The most workable travel policies use average room rates, within a given range. Require standard rooms, and be sure your policy clearly identifies which, if any, incidentals are (or are not) reimbursable. Address things such as valet parking, in-room movies and Wi-Fi, mini-bar, early/late-check-in, hotel dry cleaning, use of pool or gym, etc.

Negotiating packages with preferred suppliers that include most-desired amenities, especially money-savers such as complimentary breakfast) can make booking and staying both more convenient and comfortable without over-stretching your budget. Specify that travelers must book with preferred hotels whenever possible, or use a booking tool that automatically selects for that.

Ground transportation. This should cover not only taxis, but buses, light rail, subways, parking, bridge or roadway tolls, etc. Set a preference for using the least expensive option, but allow travelers to also consider convenience and time required. Efficiency generates savings, too. Address shared services, too – many younger travelers now gravitate to Airbnb, Lyft, and Uber. However, these services raise duty of care concerns about unpredictability and accountability. Will you provide mileage reimbursement for driving to and from the airport?

Reimbursable expenses. Provide a list of everything the company will pay for – for instance, baggage fees, or certain types of client entertainment, or cancellation fees (that are not the traveler’s fault). If possible, negotiate elimination of cancellation and change fees from rates charged by preferred providers.

But also list things you will not pay for. That might include:

  • Sundries or clothing bought while away (unless lost luggage demands immediate replacement to get on with business meetings, etc.)

  • Dry cleaning

  • Pet boarding

  • Child care

  • Gym or pool usage

  • Valet parking

  • Bleisure add-ons

  • Rebooking or cancellation fees (due to the traveler’s own negligence)

This list is important because travelers may assume you will pay for costs they incur unless you clearly stipulate otherwise.

Reimbursement process. Your policy should explain which expenses require receipts (for example, anything over a certain dollar amount). If travelers use a corporate credit card, are there any limitations on that? Also explain the process for submitting proof of expenses and what documentation is required. This should include a timeframe/deadline, because your finance department cannot provide accurate monthly T&E reporting without timely, complete expense figures.

It’s best to require actual airline and hotel receipts, rather than copies of the person’s credit card statement, because you’ll need the detailed information for reporting and travel program analysis. You also want to be sure hotel charges don’t include any add-ons that are not reimbursable.

Who receives and approves expense reports? Are there bookings or other expenses that will require pre-approval? Explain when employees can expect their reimbursement. Technology that allows instant digital capture of receipts makes it fast and easy for travelers to submit more detailed expense information, giving your company more data to evaluate your travel program.

Meals. Most companies find the easiest meal policy is to specify a per diem amount. That way travelers can decide for themselves how they want to spread out the cost over the day. If they can book a hotel with free breakfast, all the better. Be sure to also specify if there is a maximum (or other limitations) associated with entertaining clients at meals or otherwise. Will alcoholic beverages will be covered? Under what circumstances? And what about tips?

Meal per diems also cut down on paperwork, since no individual receipts are normally required. Be sure to explain how to find the approved per diem amount for any city for domestic or international travel.

Duty of care. Many companies require travelers to submit a copy of their itinerary and where they will be staying before setting out on a business trip. However, by outfitting your entire team with a comprehensive digital travel management platform, travel managers will automatically know every employee’s travel status and how to contact them.

Your policy should explain what to do in an emergency, whether it’s a medical problem, a natural disaster, terrorist or local unrest, or a trip-related snafu. Who to contact, and how. (For example, Lola.com’s digital travel platform puts live help at your travelers’ fingertips, 24/7.)

Foreign travel. If your people travel internationally, this section of your policy should include information on how to contact the local US embassy. You should also provide broader training for those travelers on personal safety and security.

Bleisure. Most companies now allow, even encourage, travelers to add on a day or several for personal rest and relaxation. This saves employees money on mini-vacations and emphasizes the value of down time. If your company allows this, be sure your travel policy is clear on what portions of the expenses employees must pay.

Loyalty rewards. Be very clear on whether employees can keep the miles and other rewards they earn when they travel on business. Most companies used to keep these, to reduce T&E costs by applying the rewards to future trips. However, this is no longer considered an employee-friendly practice. The novelty of traveling for work wears off quickly, and frequent trips out of town are wearing on your traveler as well as their family. Burnout and job dissatisfaction are all-too-real consequences that worry employers.

Allowing people to keep their rewards is a simple but very effective way to thank them for their willingness to go the extra mile (literally) to grow your company. Even better, encourage them to take time off and use their rewards to kick back and relax.

Communication plan. If you don’t overtly market travel policies to your people, how will they know such guidelines exist? Clearly explain the key when, where, and how elements, then explain why these policies are important for travelers and the company as a whole. While your communication plan won’t technically be part of your travel policy, it is a critical companion piece if you hope to reach T&E goals.

Is there anything that cannot be covered by a travel policy?

Not really. You can include whatever you feel is relevant, and in as much detail as you want. However, the longer and more convoluted your guidelines become, the less likely the chances that anyone will read them, let alone follow them. Stick to what matters most, and stick to the essentials in each category. Your employees will love you for it, and they’ll repay you with willingness to do as you ask.

So, short and sweet wins the day!

One page should be sufficient to hit the highlights – flights, hotels, rental cars, meals, ground transport. Of course, you’ll need to create an expanded version that goes into greater detail for the main categories, includes the full list of what is, and is not, reimbursable, etc. and outlines how to handle unusual circumstances. Even so, that should not require more than three or so pages. Post it on your company intranet, use it in training sessions, and periodically remind employees that your company has a formal travel policy everyone is expected to abide by.

Simple. Easy. Convenient.

How to develop a travel policy

We noted earlier that sample travel policies can serve as a template for creating your own. But you cannot simply fill in the blanks, because your company’s travel goals and needs are unique to your business. So how do you go about developing your own corporate travel policy?

Start with a self-assessment

Do you currently have a travel policy that needs to be spiffed up (or completely overhauled)? If not, how are you handling travel planning, bookings, expense reimbursement, etc.? Ask yourself:

  • Why do your people travel (conferences, client meetings, etc.)?

  • How often do they travel?

  • Where do they go most often?

Look for gaps in your travel management efforts that need to be filled as well as where things are working well because these will help define your policies. For example:

  • Let’s assume your travelers are currently in the habit of booking air travel with more expensive refundable flights, even though data shows they rarely need to cancel or reschedule. A new policy requiring non-refundable bookings would save money.

  • For your most common destinations, negotiating contracts with specific hotels in those cities rather than chain-wide agreements might serve travelers and your budget better.

  • Do your travelers use their own credit card or a corporate card (or both) to pay for travel?

Define your travel program goals

Travel is pointless and a colossal waste of money if it doesn’t help achieve overall business goals as well as travel program goals. You probably want to:

  • Control costs

  • Keep folks safe and comfortable on the road

  • Keep track of them while they’re away

  • Establish an efficient, accurate expense submission/reimbursement process

  • Capture timely T&E data

As you formulate your policies, consider:

  • Traveler demographics -- your Baby Boomers are likely to have different expectations than your Millennials, and you need to plan for that because “best” experience is not one-size-fits-all

  • Balancing cost savings against traveler aggravation to improve everyone’s experience

  • Cost savings

  • Convenience

  • Ease of use

  • Company culture

  • Duty of care responsibilities

  • Non-emergency traveler support (cancelled flights, other trip-related problems)

  • Procedures to be followed for each category

  • How travel management technology can support entire process


Why bother to consider all these details?

Developing travel policy that will be honored requires a holistic approach. Failure to do that can result in frustration, lack of compliance, fatigue, reduced productivity, job dissatisfaction, higher turnover, diminished customer/client relationships, higher costs, and cloudy travel program data. Instead, policies that take into account the challenges and needs of everyone involved in your travel program can boost compliance, morale, job satisfaction, and on-the-road job performance (the very reason people are traveling in the first place).

Who will use your travel policy?

Travelers are the primary subjects/beneficiaries of your travel policy. But travel affects staff throughout your organization — travel managers, HR, operations, finance, even department heads in some companies — so your policies should address the needs of everyone who touches your travel program in some way.

Effective policies cover everyone who travels, from the C-suite on down. This shows leadership because employees emulate their higher-ups, and it also eliminates friction that naturally results when employees feel they’ve been divided into classes or that someone else is getting preferential treatment. When leaders follow the same rules it underscores the importance of travel policies.

As a corporate safety precaution, many companies include a policy limiting how many top executives can fly together.

How strict should your travel policy be?

Guidelines that are clear and effectively communicated generate far greater compliance than rigid rules. Employees who are expected to use their brains and good judgment in all other work-related circumstances resent being treated inflexibly when it comes to travel. They will rebel. So think about:

  • How strict your company is overall? Travel policies should reflect your corporate culture.

  • Reasonability – for example, at what point does it make more sense to allow travelers to upgrade to business class when booking flights?

  • Options that provide freedom of choice. Leeway is a continuum, so there is no right or wrong here. But giving travelers a range of choices for flights, hotels, and meals improves compliance as well as morale.

  • Very important these days: will you allow employees to expand business trips into bleisure experiences? If so, you’ll need to spell out which expenses the company will not pay.

Rigid policies may seem most likely to assure compliance, but they are actually more likely to generate rebellion. In the end, the key to employee happiness is a travel policy that covers all the essentials, but is not so complex that no one wants to read it, let alone follow it. Whatever policies you create, you must ensure everyone knows they exist, where to easily access them, and how to follow them.

Sample travel policies

So what separates good travel policies from bad ones? Here’s the ultimate litmus test: does it control costs and ensure the best possible traveler experience and give you the data you need for successful travel management?

Bad policies are pretty easy to spot. They:

  • Are cluttered with unnecessary minutiae. Even in the “full course” document that covers what-ifs and the finer details of some policies, too much is overwhelming.

  • Are out of date. In today’s fast-changing travel environment that may not take long, which is why regular review and tweaking is so important. If your travel policy is irrelevant, no one will pay attention to it.

  • Don’t provide realistic leeway. Too-low pricing guidelines are bound to book employees into less-than-savory lodging. Too-cheap airfare restrictions are bound to result in more or longer layovers, excessive costs for baggage fees, etc.

  • Give short shrift to your duty of care responsibilities. If you don’t know where your people are when they’re on the road, you cannot communicate with them or help them when they need it.

  • Rely on old-school travel expense reporting, requiring paper receipts and so on that waste time and invite the mistakes and omissions that come with manual input and transcription. This is not only a frustration for travelers and your accounting department, it virtually assures that all information will not be received in a timely manner, skewing budget reporting and hampering the company’s ability to make swift, sound business decisions.

  • Force employees to hand over travel-related rewards to the company. While this may help offset T&E costs, company benefits will be erased by negative effects on employee morale. Travel is not fun. Letting them keep the rewards is an easy way to let people know you appreciate their sacrifices.

Bad policies are vague, cumbersome, and ineffective. But yours won’t be if you follow these principles:

  • Clearly spell out what you want travelers to do – or not do. You can’t fault them for doing the wrong thing if they don’t know it’s wrong. For example, when is it OK to upgrade flights, rooms, or meals?

  • Good policies are backed by technology that connects everyone within your organization who touches travel in some way and gives them the information they need, right away. That way, following policies can be painless and efficient whether you’re booking, monitoring, or managing the budget.

  • Continuously improve your policies with ongoing assessment for relevance and experience. Continuously improve travel administration using metrics that are strategically aligned with your business and travel goals. Deep, on-point data supports long-term planning and budgeting, but it also should give you real-time visibility into your travel program as it unfolds.

  • Solicit input from everyone involved. You can’t “consider” stakeholder needs or challenges without hearing directly from them. Their perspectives on travel can be very different. Plus, people who feel listened to are more apt to support the policy you create.

  • Allow travelers to tailor bookings to their personal preferences as much as possible.

  • Make travel policy documents available via intranet and your one-page summary available via your mobile travel platform, so access is fast and easy from anywhere. If people have to hunt around for answers, they won’t. A mobile-friendly travel management platform provides 24/7 access for everyone.

  • Include an education/training component that not only outlines the guidelines themselves but explains the reasoning behind them. Knowing the “why” helps employees understand how their travel impacts and contributes to the company (from financial and performance standpoints), which motivates willing compliance.

Studies have shown that those who are most familiar with their firm’s travel policies are most likely to follow them. Smart travel managers are not only “marketing” their travel policy to internal users through ongoing training and reminders, they are using fun tactics such as contests to highlight key policy elements and celebrate success in reaching T&E goals.

How much leeway should a travel policy have?

Employees are not robots. They are individual people, so each employee is different. Offering flexibility within guidelines demonstrates you care about those individual differences, not just the bottom line. You want employees to feel safe and comfortable on the road.

The easiest way to offer leeway is to adopt corporate travel management platform that automatically sifts through options and presents your travelers with choices that fit your guidelines. They can pick what works best for them among the options without wondering if they’re booking appropriately.

Consider how you want to handle shared services. This is a perfect example of how travel trends change and directly affect business travel and your policies. Not so many years ago, Lyft, Uber, and Airbnb weren’t even on your radar. Now, many of your employees (especially if they’re younger) may prefer these options. Shared services can save money and please some travelers, but they also present new challenges when it comes to traveler safety and security. Your policy should address and clarify these issues.

Resist temptation to include every little thing

We noted earlier that you can include whatever you want, in any amount of detail, in your travel policy. However, we also noted volume directly correlates with lack of interest and compliance, so getting carried away is counter-productive. Besides, there are so many variables and challenges and what-ifs commonly associated with business travel, you might never finish composing your travel policy. So rather than asking what does not need to be included, let’s review the key must-haves:

  • Company-tailored relevance – reviewing sample travel policies to get ideas is a good time-saver, but don’t include anything in your version that doesn’t apply specifically to your company.

  • Rewards and benefits for travelers as well as guidance (bleisure, retaining miles and points earned, etc.)

Most companies solve the what-to-include conundrum by creating a comprehensive version of their travel policy that details processes and procedures, addresses unusual circumstances, and stipulates who is responsible for re-approving unusual or out-of-policy travel needs. Then they create a one-sheet for everyday use that covers key points on booking and expense reporting. That way, employees and travel managers have the full information when it’s needed, but no one is bogged down in minutiae.

Conclusion

Travel managers often complain that employees don’t follow the rules. However, with a well-considered policy in place that is designed to address everyone’s key needs, you make it easy to comply. Back that up with accessibility, thorough training and ongoing reminders, and you can replace frustration and overspending with happiness and predictability.

In fact, the more employees that understand the reasoning behind policies, the more likely they are to follow them. They know your rules are not arbitrary, but formulated to benefit them as well as the company. By staying within the guidelines, travelers can become stronger stakeholders and more engaged in the company’s business and financial success.

Ready to make your own corporate travel policy? Download our free, customizable Corporate Travel Policy Template


posted by

Jeanne Hopkins

better corporate travel starts here.