Boston – It’s folly to look for consensus on which way corporate travel policy is moving. Speakers at the Global Business Travel Association convention here last week displayed a wide range of approaches and opinions.
On one panel, a travel manager wished his company’s policy was stricter while his co-panelist said she strives for a softer touch and would prefer a more lenient policy. Take compliance. McKesson Corp. tracks everything and established an internal system to notify management when employees stray from program rules, according to travel and fleet director Howard Brooks. Travelers and their managers are advised of noncompliant bookings. At the end of each month, regional and business unit CFOs get reports of all policy violators. A few days later, those reports go to the global CFO.
“We issue specific points to pay attention to,” Brooks said. “It is not just sending the report but saying, ‘Pay special attention in this business unit, this person is doing this or that.’ ” Brooks said the company pits business units against each other to improve compliance.
Describing himself as a bull in a china shop, Brooks said he doesn’t believe in leaving the policing solely to budget holders “because so many people sign expense reports without reading them.” He doesn’t care if the travel policy is thick: “It needs to address absolutely everything or you have no right to tell people they are wrong.”
All that said, Brooks added that the company revised email messaging sent along with compliance reports to be “softer and more polite.” The idea isn’t to slap wrists or withhold reimbursement, but rather make managers aware of what to watch for. “It may warrant discussion with employees,” he said. Noncompliance, at times, “may be justified. Ten million things can happen. Plans may change.”
McCain Foods Limited handles noncompliance in a very different way. The $CA8.5 billion ($6.3 billion) Canada-based multinational food supplier doesn’t promote competition between departments. It does compliance reporting, “but not to the global CFO,” said global travel services manager Connie Smith. “In travel data, there is a story to be told on every individual trip. You need to be really careful when reporting individually on compliance. After the course of a year you’ll have a good idea of a watch list. We know who we need to watch and send reminders to. It is more softly done.”
In certain regions, including North America and the United Kingdom, McCain randomly audits expense reports. “But who am I to report on individuals when their manager approved the trip?” Smith asked. “They are accountable for cost centers and budgets. If you overspend today, then travel differently, smarter or not at all tomorrow.”
The duo also presented distinct ways of communicating policy. McCain uses an e-learning center. When the company last year introduced a new travel policy, it asked employees to review it in that channel — and acknowledge they had done so.
“It didn’t require reading line by line, but we made sure key areas were highlighted and followed up on with questions,” Smith said. Employees can move through at their own pace; Smith said it took her about 30 minutes. McCain had done the same for the corporate card policy, “to make sure they understood what they are responsible for … and consequences if they are not adhering to policy.”
McKesson, a $199 billion healthcare conglomerate, undertakes communications in another way. Referencing his “showbiz background” — Brooks had managed travel at Sony Music — he said “we do it more glitzy.” That includes Brooks trying to “be entertaining and memorable” when speaking at meetings. Company communications also include campaigns meant to leave an impression.
Among those are “anti-shared economy campaigns,” Brooks said. He explained that he has “strong feelings” about the providers in that realm. McKesson doesn’t work with Uber (though it does use Lyft). Brooks isn’t keen on Airbnb. Communications help travelers understand why the company discourages use.
“Procurement in general needs to deal with liability issues and not just saving money,” Brooks said. “One good lawsuit [can undo] everything you have done. Don’t make cost the final factor.”
Again, there’s a different story at McCain Foods. Smith said in the past few years she’s come around on ride- and home-sharing services. She retold the story of how her CEO and CFO were shocked that the company wasn’t using Uber. Purchasing data showed the company actually was using it. So she reached out to the risk management department and the company’s insurance providers, and found out that Uber is viewed by them in the same way as traditional taxis.
“I realized that maybe I was the roadblock and I don’t want to be the roadblock,” Smith said. Now Uber is covered by McCain’s travel policy.
She said Airbnb is “a bit different,” though the concept of home-sharing is nothing new.
“I can’t just look at my point of view, but the point of view of the majority of company,” Smith said. “I don’t believe Airbnb will replace the corporate hotel but there is a place in the market for it. We have a tendency to live by fear, but that’s not how to get things done.” Airbnb isn’t currently addressed by the company’s policy, and therefore it is not specifically denied. Smith said discussions with stakeholders are ongoing.
The two also offered slightly different views on using employee incentives to promote travel compliance. Smith said she is not sold on the idea. Part of her hesitancy is a familiar sentiment: “Maybe I am the roadblock now, but I have a hard time giving them that incentive to do the right thing that’s already in policy. There are other company initiatives and benefits that can be better utilized than reimbursing the traveler who opted out of business class and went for economy.”
McKesson is trying out Rocketrip. Brooks said the company’s administration staff — representing $5 million worth of annual travel volume — are testing the platform to see how much they can save. “You have to be careful about the economics,” he said. “You have to be careful about how you define what you will pay on and what you won’t. Travelers are game players. They will find ways to game the system.”
Perhaps the biggest difference in perspectives came when session moderator Neil Hammond of GoldSpring Consulting asked what the panelists would change about their organizations’ travel policies.
“It would more leniency around business class,” Smith replied. “We do have a bit of tiered policy when it comes to that. It’s an area we monitor hard.”
Brooks followed: “Your keyword is ‘leniency’; my keyword would probably be ‘stricter.’ ”
He provided the example of internal travel, which McKesson determined was a bigger portion of travel spending than traveling to see potential and existing customers. After that “crazy” realization, the company introduced a ban on same-day travel for internal meetings. Brooks said it saved $5 million. The “original” idea, though, was to include in the ban such trips that also were one night. He said that would have doubled the savings, but leadership “wanted to start slow and ease into it.”
He would have gone “further,” said Brooks, “but next year is a new year.”
Across The Spectrum
A separate session at the GBTA conference also depicted how two travel programs recently moved in opposite directions.
When Akamai global travel manager Priscilla Campbell joined the company a few years back, she said, road warriors could fly business class. Though a pre-trip approval process was in place, certain groups of employees — like salespeople — were exempt. There were other “nice features” for travelers. But then “the tides of change came along,” Campbell said, “and we found ourselves in a situation where we had to dramatically cut back on spend. Along with that are unpopular policy changes.”
Now pre-approval is required for everyone. Anyone booking a trip less than 14 days out needs secondary approval. The $2.3 billion internet services company halved its volume of discretionary travel. Business class is prohibited — no exceptions. “Even road warriors were downgraded to premium economy for long-haul flights,” Campbell said. For frequent travelers, at least, “chances are they have status and miles and are welcome to use that to leverage a better seat.”
Of course these changes didn’t sit well. Communications helped to soften blow. “I found it beneficial to turn the conversation and focus on what is still in place,” Campbell explained. For example, travelers are allowed to purchase seats in coach with extra legroom. They can pay a bit more to avoid middle seats. They still get various perks and promotions from Akamai’s preferred suppliers.
In messages to employees, the company’s CEO and CFO detailed the reasons behind the policy changes. Campbell said she explained to travelers how individual choices add up.
By reducing non-customer-facing travel, boosting 14-day advance purchasing by 28 percent and realizing lower average ticket prices, Akamai cut its global air costs by $6 million.
Macerich Management Company also recently trimmed travel expenses, but took a much different route. Its goal was happy travelers.
In recent years the $1 billion retail real estate company began reimbursing for Global Entry and TSA PreCheck, allowing business class on flights of four hours or longer and encouraging travelers to call offline customer support.
“We promoted the idea of making that phone call, talking to a human,” said Carol Velasquez, the company’s assistant vice president of procurement. “Don’t worry about the fee. I have a favorite agent myself and I appreciate that moment.”
Velasquez said the results were satisfied travelers, higher online adoption and $150,000 in savings.
How did a more traveler-friendly policy cut costs? The changes provided an opportunity to reel in travelers and make them aware of the program’s virtues. “It brought them back to utilize our tools so they could benefit from discounted rates which are only accessible through the online booking tool,” Velasquez said. “When we promote that constantly, it brings them back. We were able to gain more control; our approach was just different.”