We’ve said before that the cornerstone of an effective travel management program is the business travel policy. Travel policies that are practical and easy to understand have a higher compliance rate and save more money for the company. But where do you start? No business is the same, and neither is their travel policy. Whether you create your own travel policy or with the help of a travel management company, we developed this guide to familiarize professionals with the basics of creating business travel policies.

What is a business travel policy?

A business travel policy is a set of guidelines to be used by companies, travel managers and employees for travel and its related planning. The main objective of an effective travel policy is to keep travelers safe while also adhering to the company’s guidelines, including budget. If your policy is easy to understand, oversees traveler’s security, and up-to-date; compliance will likely be higher as well.

What are the benefits of having a business travel policy?

There are many advantages of utilizing a travel policy for your company. One of the most valuable is establishing clear guidelines. For example, your company might decide to allow business class seating, but only for international travel. This is then stated in the travel policy, so your present and future employees will understand its stipulations.

Travel policies also regulate cost control and savings for your budget. By regulating your traveler’s travel, you can have a better understanding of your budget and where to save moving forward. For example, just by outlining when business class tickets should be used can positively affect your travel budget! Additionally, duty of care responsibilities and safety protocols can be established and outlined. In case of an emergency, these protocols can be immediately adhered and followed.

Is every travel policy the same?

No. Every business travel policy should be created specifically for the company’s needs. No two companies are exactly the same, and neither should be their travel policy. Actually, some companies find they don’t even need a defined travel policy. How often employees travel and who pays for the travel are two important factors. If only one employee travels a couple times a year, you may be able to budget and communicate effectively without needing a full travel policy. Or, if your clients are billed for travel, budget may not be a large concern for your business model. Take a look at your company as a whole and see if it makes sense to create a travel policy. If you find you don’t need one, it’s still important to outline duty of care and safety procedures. 

How do travel policies differ?

Policies should be comprehensive and consistent, but also consider cultural nuances. This is done by differentiating between global and local policies. As the Business Travel Buyer’s Handbook 2016 said, ‘The global policy should rule, and local policies should be stricter.’ If your company is worldwide, you will have conditions that apply to everyone. Then, consider local laws and constraints for travelers in different locations.  What works best for people in the U.S. may be less advisable for people in Asian markets. You can try creating regional travel policies for countries with similar travel management needs. 

How strict should your travel policy be?

Policy rules often depend on the level of control your company wishes to exercise.  For example, some companies stipulate that the cheapest ticket must always be purchased, as long as a layover does not exceed three hours. This policy is focused on cost savings, but pretty strict. Other companies decide not to drill down as harshly. Consider what is most important to the company and the best way to accomplish that objective. Be aware that overly strict policies can hinder compliance and even your traveler’s happiness. If your frequent business travelers have three hour layovers multiple times a week, how will that affect their productivity and job satisfaction? Consider your company culture and its future before implementing a strict policy. 

What is important to include in a business travel policy?

This depends on your objectives and scope of control.  Below are common items often listed in travel policies: 

  • Air travel – Will your travelers have a budget? Should the lowest priced ticket always be purchased? Should non-stop vs. direct flights be defined? 
  • Travel approval – Will managers approve the travel itinerary before it is booked? How will this be done?
  • Hotel suppliers – Will employees always stay with the same hotel supplier? What happens when there is a lower priced room at a different hotel?
  • Car rental – Should you specify what type of cars are allowed as rentals? Compact cars vs. limos? What about using sharing economy cars like Uber? 
  • Reimbursement systems – How will employees be reimbursed for travel expenses? Or will they use a company credit card? Are there repercussions for not submitting receipts? 

Who should create the travel policy?

Input from every department works the best. Having input from a CEO or stakeholder often speeds up the process, as their approval is usually needed anyway. Discuss with HR, accounting, IT and heads of other departments to ensure their cooperation and input. Also, discuss the needs and experiences of current travelers and road warriors. What they consider important may be different than the stakeholders. 

Who is covered under a travel policy?

Travel policies should cover everyone who travels on behalf of your company. Additionally, and this may be the most important tip – keep the policy brief and clear so everyone is covered and understands the policies. Compliance will go out the window if no one understands what’s in the policy.  

Specific details can be outlined for individuals or departments. Some companies differentiate policy guidelines with special consideration for high ranking execs. You probably won’t have interns flying first class, but you also aren’t going to make the CEO fly coach either. Some companies mitigate potential disaster by not allowing more than two or three executives to fly on the same plane should disaster strike. These particular policies are often drafted in an executive level policy, so they are not known to lower level employees.

Road warriors often have their own stipulations. You can specify mileage, reimbursement, or overnight stay threshold within the travel policy too.

Other things to consider when creating a business travel policy

Customized and personalized experiences are becoming more important to travelers. Mobile devices and apps are being used more frequently, catering to specific experiences. If you want compliance to stay high, make it as easy as possible to comply with your policy. Using mobile apps or alternative communication often increases compliance. 

 

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Carmen White

Carmen White

Carmen is the Digital Marketing Specialist for Christopherson and has been in the marketing industry for more than 6 years. She enjoys learning the ins-and-outs of the business travel management industry and sharing it through blogs or social media. When she's not planning her next vacation, you can find her hiking in the mountains around Denver, CO. Connect with her on LinkedIn!

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