Convincing your CFO of the need for an automated T&E process
While some of your business travelers might not comply with your travel policy on purpose because they feel entitled to higher budgets or more luxurious travels, the majority of your employees actually want to comply with your corporate policy.
However, there are many reasons why this is sometimes more difficult than it should be. The first step to increasing compliance with your company’s travel policy is thus understanding why your employees are currently not complying. Talk to your employees and ask them for detailed feedback to understand where the shoe pinches.
Once you understand the reason(s) why your current travel and expense policy is not working, it will be easier to devise effective strategies to increase compliance with your travel policy. We identified seven common reasons why corporate T&E policy compliance rates are low.
If your employees do not know you have a corporate travel policy, you cannot expect them to comply with it. While this may seem like an obvious reason, it is the root cause of many low compliance rates. Attaching a document to an email and sending it to the entire company is not good enough to ensure compliance. Most of your employees are busy people that could probably not be bothered by your corporate travel policy. It is unlikely they will even open the document attached to your email.
While a 20-page document might seem easy to understand to the person who wrote it, this might not be the case for time-pressed or stressed employees. Make sure your corporate policy is concise, to the point, easy to understand and apply, and employees can quickly find the information they are looking for. Also, make sure to state very clearly whether your policy consists of flexible guidelines or rather strict rules that should always be followed. Finally, make sure to outline the steps your business travelers should take in case of unplanned scenarios. What should they do in case a flight gets canceled?
Many companies have travel policies that do not necessarily align with their company culture or other corporate policies. This will create unnecessary confusion or frustration with your business travelers.
If your company propagates leadership and decision-making by empowered employees, then using strict rules in your travel policy rather than flexible guidelines and requiring approval for small expenses might seem odd and annoy your employees. Or if your company propagates flat hierarchy and collaborative leadership, then employees might be unhappy to learn that senior executives get to fly first class while the rest is flying coach. However, employees might be happy to share rooms while on the road when they know that even their CEO does it. (Wall Street Journal, 2018).
Sometimes, T&E expense policies do not match a company’s business objectives. Is the top goal optimizing the time of your employees at the destination? Making their life as easy as possible so they will perform at their best? Or spending as little money as possible? Getting a clear understanding of the goals your organization wants to achieve by sending your employees on a trip will make it easier for your employees to actually achieve those goals and will alleviate some of the confusion and frustration that comes from a travel and expense policy that does not support your business objectives.
When was the last time you updated your travel policy? While your policy might not have changed, your employees and the way they travel and make expenses certainly have. Digital receipts, mobile applications, Uber and Airbnb amongst others have transformed the way employees travel in their private life. Moreover, with millennials entering the workplace, your workforce and expectations have also changed. However, many organizations have not updated their corporate T&E policies yet to allow for these kinds of changes, creating confusion and frustration amongst your employees. Up-to-date T&E policies align with the lifestyle of their employees and take into account the ‘bleisure’ trend and the consumerization of business travel.
Your organization probably consists of different types of employees that travel for different reasons to a multitude of destinations. Your travel policy should reflect this diversity. A junior sales rep traveling to a cheap destination for a tradeshow will have different needs and expenses than a senior executive wining and dining potential new clients in New York. Moreover, business travel is dynamic, and your travel policy should reflect this. Maybe one of your employees booked a room that is $35 more expensive per night but is within walking distance of the clients she’ll be meeting, while the cheaper hotel is a $20 taxi ride away. Tarring all business trips over one brush or making the rules too rigid will undoubtedly lower your compliance rates as certain expenses that make sense for your business might violate your travel and expense policy.
Even though this is a minority, some employees knowingly submit expenses that exceed the limits set in your T&E policy, book hotels that are not on the list of preferred vendors, book airfares without using your travel management company or ignore approval procedures. This could be because they do not agree with your travel policy, approval procedures or choice of travel management company, or because they feel entitled to a higher travel budget.
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