Building a corporate travel policy.

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What is a corporate travel policy?

A corporate travel policy is a tool designed to help both employees and company executives make effective decisions. It explains what you expect from traveling employees and what they can expect in return.

Some types of corporate policies are simple.

For example, your company allows X number of sick days each year. Travel policies? Not so simple. Making travel arrangements and living the plan involves any number of variables. There are contingencies that have to be considered. And your company has a Duty of Care that must be observed to keep your people safe and secure on the road, even in an emergency. Your travel policy has to cover all these bases.

The introduction should explain why your company has a travel policy and how it benefits your business travelers. Remind people that they represent your firm while they’re traveling, so their behavior reflects on your brand as well as themselves.

Every company’s travel policy is somewhat different.

That’s because the details reflect the reality of your corporate travel needs and your company culture. Think of it as a continuum.

On one end, there is an absolute policy that sets out specific rules that must be followed, no matter what. This approach can save money, as it often focuses on least-cost travel options. It can also frustrate employees to the point where they simply ignore the policy. How can they apply the same rigid rules to vastly different destinations or travel purposes? What happens if there’s an unexpected change?

At the other end of the spectrum, there is an “almost anything goes” policy that lets employees DIY their travel plans within a few general guidelines. The problem here is lack of consistency that inevitably winds up costing your company more without giving you any real visibility into where the money is going.

Both ends of the spectrum will produce policies that employees won’t like, and won’t follow.

Happy medium works for everyone.

No tool has value unless it is truly useful. A travel policy that takes a balanced approach can address the company’s need for timely, accurate, and complete financial information as well as employees’ need for flexibility and choice:

  • Transportation, hotel, and meal parameters that consider convenience, comfort, and work productivity on-the-road as well as cost.
  • Extras or exceptions that are unique to your organization.
  • Clear explanation of what expenses are reimbursable (or can be charged directly via corporate credit card) and the required reporting procedure.
  • What arrangements travelers can make on their own, and what requires prior approval.

Digital technology ties it all together.

A travel policy that is clear and relevant can be a great tool. Unfortunately, many companies falter when it comes to compliance – mainly because making approved travel arrangements is inconvenient and time-consuming. Employees have to sift through a myriad of searches to find appropriate flights, lodging, etc.

Not so, with a customized digital tool like Lola.com. Travel planning and follow-up processes are fully integrated, based on your organization’s travel policy guidelines and preferences. Your business travelers can secure acceptable, cost-effective reservations without all the floundering around. They can capture all their expenses on the go, ready to submit efficiently and quickly upon return. When you make it easy, you don’t have to worry about non-compliance. Without rules, chaos ensues. By creating a corporate travel policy, you get:

  • Consistency and predictability
  • Cost visibility and control for better budget management
  • Complete, accurate, financial and travel usage data for better decision-making
  • A better “customer experience” for traveling employees that can boost morale and productivity

Not “one and done.”

Since it will be time-consuming to create your first corporate travel policy, you may be tempted to heave a sigh of relief when it’s finished. Do celebrate your achievement! But know that your policy is, in fact, a working document that will require regular review to ensure it remains relevant and useful. Good news, though: flexibility that benefits your travelers will also enable your policy to flex with changing travel trends and business needs.

Where to start

Where to start.

If you don’t currently have a travel policy, it can seem overwhelming to create one from scratch. Luckily, we have put together a customizable travel policy template to help get you going. The templates are great to get you started but also make sure you add the right options for your team, based on your budget and company culture.

  • Keep it short - A few pages at the most, but a one-page main policy is best.
  • Stick to the basics - Only include options that are relevant to your company. Hotels, flights, meals, and alternate transportation options.
  • Make it easy for employees to find - Make a digital copy and ask your employees to bookmark it.
  • Advertise the proper booking process - Write a quick email to your team outlining where they should book, when they should submit expenses, and where they can find your travel policy.

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What to include

What to include.

When it’s time to get into the specifics of what to include in your travel policy, first think about where your employees travel to the most, what types of events and meetings they travel for, and how often they travel. This will help you start to break down what you need policies for (hotels, flights, trains, etc) and the kinds of price limits you’ll need to set.

Setting hotel guidelines.

Hotels are a huge expense on a business trip, so setting smart guidelines will go a long way towards keeping your budget in check. But you’re not only considering the company’s overall travel budget, you also need to think about your traveler’s experience. This is where dynamic hotel pricing comes into play.

Dynamic hotel pricing is real-time pricing info that changes based on the city, time of year, and market conditions.

 

Using this method, you will be able to set your guidelines based on the cost of hotels in different cities, so you know your employees are always spending the appropriate amount of money, while still getting the same level of comfort no matter where they travel.

Setting flight guidelines.

When it comes to putting rules around what flights your employees should be booking, it’s important to remember who your “customer” is in this situation. It’s the employee. So often companies set a policy saying a traveler must book the least expensive flight available no matter what. And sometimes employees are required to book on a corporate card so that the company has the ability to keep the credit card points or worse- the frequent flier points. But if you want a simple, straightforward flight policy that your employees will follow then use traveler-friendly guidelines.

Setting meal guidelines.

Just like hotel rates, meal prices across the country vary drastically. It’s important to keep this in mind when setting your meal per diem rates. Your employees should spend the appropriate amount based on where they are traveling. Share this tool from the General Services Administration (GSA) website with your employees. Ask them to look up the recommended per diem rates for meals before they go on a business trip. This way you know they have the most up to date information and you can also be sure your company is following the correct guidelines for tax purposes.

Once your employees get comfortable with these guidelines, you can start to suggest ways for them to be more conservative with company money, and spend a little less on meals. But only in ways that ensure they’re still getting what they need while on the road.

What to avoid

What to avoid.

As we’ve said before, what you include in your travel policy will depend on many factors, including who is traveling, why, and where. But what you leave out of your policy is as important – maybe even more so in some cases – as what you put in.

Some of the common mistakes are:

  • An out of date policy
  • Too many restrictions
  • Unrealistic pricing guidelines
  • Rules around things that don’t apply to your company

Of course, having a corporate travel policy is much better for your business than not having one at all. If you still aren’t convinced that you need to set a travel policy at your company, read this article on what the lack of a travel policy can do to your employees.

Using corporate travel software

Using corporate travel management software.

If all the things you’ve read here sound good, then your next step should be to onboard with a corporate travel management software solution. With something like this, you will be able to get the most important aspects of travel for your company into an automated system.

Lola.com is a great option because it considers the experience of the person managing corporate travel for your company, and the business travelers themselves.

For the travel manager.

  • You can create a travel policy using dynamic pricing, in minutes.
  • All policy rules filter into the employee booking process, so travelers will stick to the rules.
  • With everyone booking in the same platform, you will have a complete view of all travel spend across your company.
  • Added visibility will help you optimize your budget and save money.

For the traveler.

  • An easy to use travel booking tool that allows you to book quickly.
  • The ability to enter your own loyalty programs and earn rewards directly with the hotels and airlines you prefer.
  • Team sharing features so you can get recommendations from the co-workers you trust, instead of people you don’t know on review sites.
  • 24/7 proactive service with real human travel agents before, during, and after your trip.

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