The boss of indirect spend at engineering firm Oerlikon has said the link between travel and Covid “will stay deeply marked in our collective memory”.
Jafles Pacheco, global head of indirect material spend at Oerlikon, said he doesn’t expect travel rates to return to pre-pandemic levels “any time soon”.
Talking ahead of his presentation at the Business Travel Show, Pacheco said he believed the Covid-19 pandemic had changed the way people view travel.
“Throughout the pandemic, travel has been seen as one of the highest contributors to spreading this disease. I think this connection between travel and disease spreading will stay deeply marked in our collective memory,” he said.
A report by Deloitte found only around half of companies surveyed expected to reach their 2019 levels of travel by the end of 2022.
Pacheco pointed to how the “new normal” has changed people’s, and company’s, expectations of what can be achieved from staying closer to home.
“Another aspect of it, is the managerial and financial one: throughout the pandemic, working from home, not putting your feet outside your front porch, many businesses continued flourishing, meetings were carried out, sales were completed, contracts were signed, projects were kicked off and brought to a successful end. All of this without travelling. Why should companies now go back to exactly what it was?”
With greater pressure than ever on businesses to be environmentally conscious, “pestering the environment with CO2 emissions” is another reason he believes business travel will fall following the pandemic.
However, Pacheco said the benefit of business travel comes down to “connection” and the opportunity to build relationships off Zoom.
“The only justification for business travel – or travel – is the need for people to connect. People's need to be close to each other, see their counterpart direct in the eye, be able to read their entire body language, share bonding experiences together, like going for a business lunch.”
He said “people's need to connect” has a “strong link to business return on investment”. He explained: “My take is that if I will be travelling somewhere to meet a customer, I will need to demonstrate that the investment in travel, the risks involved in it, are worth the effort.”
Businesses will also have to consider whether saying goodbye to the all-expenses-paid foreign travel will potentially leave employees looking for jobs elsewhere, and businesses will have to consider whether potential recruitment costs outweigh travel costs.
Rather than ditching it entirely, Pacheo recommends businesses look to make smarter decisions regarding their business travel.
“There are many opportunities to save costs in travel,” he said. “Starting with demand management, which is a principle in procurement that entails the question, 'Do you really need to buy what you are saying you need to buy? Can't you achieve what the business needs without that item/ service you want to buy?'
“This is about cutting travel, stopping travelling to start with. And from there you can go on and on,” he continued.
To make further savings he recommended:
• reducing the number of trips;
• consolidating meetings to avoid repetitive travel; and
• making travel less costly by using alternative, more cost-efficient suppliers.
Pacheco is holding a session titled ‘Re-tool travel as a professional purchasing category’ at the Business Travel Show on 30 September.
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