One Size Fits None: The Pros and Cons of Group Policies
Who benefits most from group corporate travel policies?
Can one size really fit all when it comes to travel and expense policy? Should a frequent business traveler have the same allowances as someone who travels for work once every two years? Should an entry level employee have the same travel privileges as an executive? Group-specific T&E policies and price guidelines may be more appropriate than a universal corporate travel policy for some companies.
Before you divide your universal corporate travel policy into group policies, or create group policies from scratch, you should consider a few things in order to determine whether or not group policies are a good fit for your company, and if so, how to best implement them. We’re giving you the scoop on what group corporate travel policies are, the pros and cons of implementing them, and what kinds of companies benefit most from group policies.
What are group corporate travel policies?
First things first: a corporate travel policy is a set of guidelines that companies create to manage how their employees travel for work. This policy sets price limits for flights and accommodations, regulates which fares travelers can choose, dictates daily expense limits while on business travel, and more.
Some companies, especially small ones, create a universal travel policy, meaning that all employees follow the same rules and spending limits.
Other companies, however, establish group policies that create distinct travel guidelines based on departments, seniority levels, office location, or other differentiators.
For example, a company may have a group travel policy for its executives, which lets them fly business class instead of economy and gives them a higher price cap for a hotel room than employees on a different level.
Pros of group policies
So why might a company implement group policies rather than make all of its business travelers adhere to one travel policy? Here are a few reasons why.
With different rules for various tiers of travelers, companies can be flexible when an exception needs to be made.
Let’s say that a growing company in a competitive field has decided, for the first time ever, to fly job candidates to their office for the final round of interviews. They may not already have a specific policy in place for job candidates, so they decide to extend them the privileges that they reserve for their executives so as to woo the candidates to accept their impending offers.
Variegated travel policies allow companies to work from precedent rather than improvising when they come across uncharted scenarios.
2. Fulfill specific needs
One size doesn’t fit all when it comes to business travel policies at companies with different types of employees traveling. Group policies allow businesses to create custom rules for different travel needs within their organization.
For example, a company could give frequent travelers more privileges than employees who travel just once a year for a conference. This company might allow frequent travelers to book premium economy as opposed to regular economy, or to stay in a five-star hotel rather than the more practical option. These privileges would allow frequent travelers to be more well rested and therefore better able to perform at work despite the constant travel.
With group policies, companies can tailor their guidelines to the travelers’ different needs.
3. Cost savings
Companies that adopt group travel policies can save money by extending higher spending limits only to specific segments of their workforce, rather than to the entire company.
For example, executives at Company X have a $150 per diem limit in order to entertain clients, while travelers to a conference get a $50 per diem. Company X could save up to 66% on its meal allowances alone by stratifying their T&E policies, rather than applying the $150 per diem to all of its employees.
Cons of group policies
Why might some companies want to stick with single travel policies?
Business travelers may feel angry if their colleagues have access to special privileges because of their tier in the company’s group policies.
In our last example, executives have a three times higher per diem meal allowance than other employees. In a traditional corporate setting, it’s expected that executives will be treated differently than other employees. In a startup, or a company with a culture that prides itself on equality, group policies may make employees feel resentful towards colleagues in more senior positions, creating harmful tension in the workplace.
Policy non-adherence is inevitable when you have a complicated travel policy. While non-adherence will most likely be caused by confusion rather than intentional disregard for the rules, these mistakes could be costly. This is why making sure your travel policies are clearly communicated and easy to understand is so vital to your corporate travel program.
With different sets of rules for different employees, travel policy administrators have more work to do to manage travel expenses. Instead of processing all expense reports and reimbursements in the same way, corporate travel managers have to create separate guidelines and verify that employees followed the correct policy. This bureaucracy slows down the T&E process.
Who is a group policy best for?
So what kind of company would benefit most from a group policy? Companies that have several travelers that differ in level, department, and frequency of travel will benefit most from group travel policies. Enterprises have enough staff to enforce and manage policies, and a large enough finance team to process expenses at various levels. But, with a corporate travel tool helping your team manage and organize group policies, companies of any size can benefit from the flexibility.
Whether your company is small or large, Lola.com’s corporate travel tool can help you create and enforce up to four grouped corporate travel policies to better manage and organize your travel spend.