Look for hidden costs in business travel, buyers told

22 February 2018

Businesses need to start thinking about employee travel “through a different lens” and identify the subtle hidden risks to “get on the front foot” and mitigate them.

Speaking at the Business Travel Show in London today, Trevor Elswood, chief commercial officer of Capita Travel, said business travel risks had broadened from just keeping costs down and ensuring safety in foreign cities.

He said travel procurement teams that focused solely on cost reduction were inadvertently throwing up a multitude of “hidden costs” for the company. 

“Tired travellers aren’t going to be particularly productive travellers the next day but it’s a hidden cost – travel procurement teams have done their job of procuring but at the end if that’s an unproductive meeting it isn’t going to get the net result in revenue provision for an organisation,” he said.

He said that after he started to think about business travel and meetings in terms of their end goal, the risk emphasis changed to identifying more subtle risks that reside in an organisation.

He cited one company he worked with who put an air and rail travel ban on their employees and were happy when they managed to bring their air and rail bookings down by 8%. However, after viewing their mileage data, the company found that while travel in air and rail had decreased, car usage had increased 8%.

“What it showed is that there was a disproportionate number of car journey’s over 300 miles, which turned out to be unproductive in the number of hours they used up travelling and actually a danger in some of those trips because of their length,” he said.

He said another unforeseen risk of travel was absenteeism as a result of employees travelling too much, which ultimately affected their overall productivity. 

“When looking over data, what we found out is that certain age brackets, certain genders and certain travel patterns themselves – concentration of travel rather than the number of travels per year – actually did lead to absenteeism,” he said.

“Absenteeism is unproductive and probably an insurance risk as well when it comes to mental health and wellbeing being on everyone’s agenda.” 

In another example, he said his company looked at crime rates in the UK as part of their hotel programmes.

“We asked when companies create hotel programmes, why were they not considering that while the hotel selected might be luxurious and a good price, what is the crime rate in the area and what does that mean as a risk?” he said.

“With that information, we were able to make judgement calls on if certain hotels were inappropriate for business travel use.”    

He said once a procurement team can identify the possible hidden risks of business trips, then they could look at their travel policies in a different way and mitigate them.

“Data is the key – if you have all the data at your fingertips about a certain employee and their travel schedule you could say, ‘That employee, if they travel any more at this trajectory, they will probably going to go into the high risk category’, and as result you can advise and plan around that and reduce the risk to that individual and the company,” he said.

“Overall, getting a team to sit down and think in that different way and looking at business travel in a broader sense will identify those potential smaller risk factors, but also from there you can work to reduce them because the bottom line is that prevention is better than the cure.”

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