Writing an effective corporate travel policy
There’s a lot to consider when arranging business travel, so it makes sense to have a robust corporate travel policy in place. Setting out all the relevant procedures will help keep your employees safe while working to reduce your business’s travel spend. Some of the key steps to creating your ideal company travel policy include:
- Defining your objectives.
These could include keeping costs down, ensuring employees are safe and comfortable and helping them make decisions on their travel.
- Ensuring your travel policy reflects travellers’ needs.
Consider the most common destinations for your business travellers and the best way to get to them, are there specific needs or considerations related to your company’s activities?
- Giving your employees options.
Everyone likes to have a choice, so try to give your employees a selection of hotels or airlines. You can keep costs down by capping the hotel star rating or class of airline ticket.
- Setting clear guidelines for all aspects of travel and more.
Your travel policy needs to be all-encompassing so it leaves no room for doubt – that includes everything from airline booking rules to the policy on areas such as additional expenses and the acceptance of gifts.
- Making sure everyone knows what the travel policy is.
All relevant documents need to be readily available to everyone within your company whether via the intranet or a travel platform. The policy needs to be clearly communicated to all, including line managers so they can enforce it.
Corporate travel policy best practices
When writing a corporate travel policy document, one size doesn’t fit all. You should start by thinking about the nature of your organisation – is it pretty strict or relaxed? Make sure your travel policy follows the same tone.
Highlight how important it is that your employees read the document, not least for their own safety, and clarify what they need to do in an emergency situation, as well as who they’d need to contact.
Other information you should include is how business travellers should get to and from airports, and to what extent they’re permitted to combine their business travel with their own leisure.
Empower your employees by giving them a choice of hotels while capping the star rating or cost per room. Impress upon them the fact that complying with your travel policy will ensure the smooth and easy reimbursement of additional expenses. Finally, keep reviewing your corporate travel policy. Flexibility is key, and your travel policy and procedures should be open to the changing requirements of your employees and your business.
Remind your senior leaders that this is for them as well as business travellers –if everyone follows the policy it will help your company offer more effective support to its strategic partners, as well as allow better management of its expenses budget.
What to include in your corporate travel policy
There are many aspects of business travel to consider before writing your corporate travel policy. While your policy should reflect the unique needs of your business and employees, you’ll need to establish policies for these fundamental areas:
- Airline, rail, hotel and rental car reservations.
- The use of other transportation, such as taxi cabs.
- Rules for on-site spending, including meals, entertainment and phone calls.
- Security relating to travel – both in terms of personal safety and work materials.
- The rules around gifts and favors that may be bought or received during business travel.
- The approval process that employees and managers need to follow.
- The system for the payment of any expenses incurred during travel.
Laying out your travel expense policy
Establishing a clear and fair expenses policy is vital to the health of your business – poor management of travel expenses costs your business money. Here’s how we’d recommend your policy approaches a range of key expenses:
Additional travel
State that travel costs will cover the purposes of business travel only – whether to events, meetings or training – and that non-business or leisure travel comes out of the employee’s pocket. You should also encourage business travellers to use the most cost-effective mode of transport, taking expected journey time into account.
Accommodation
Empower your business travellers by giving them control over their own spending – capping their budgets by hotel star rating or amount per room. You could provide average room rates in each location, and ask them to stay within that range. Specify that standard rooms should be the required room type, and clearly outline whether your business will cover minibar charges, Wi-Fi costs, etc.
Meals
Depending on your company culture, you can be as explicit as you like with your meal policy. Many companies find it easier to offer a daily allowance that covers breakfast, lunch and dinner, but your policy should include a statement about alcoholic beverages – usually to clarify that they will be at the employee’s cost, unless they’re with a client.
Tips
Many corporate travel policies cover tips to 20 percent, but only when it’s already been included in the bill as a service charge. If a business traveller decides to add a tip for anything else it should be out of their own pocket, or at a manager’s discretion.
Entertainment
Entertainment can cover eating, drinking or any other hospitality. The most effective way to manage entertainment expenses is by setting a limit or range, and advising that managerial approval will be required for any reimbursement above and beyond this amount.
How to forecast your budget
Using data on traveller behavior and previous expenses is key to setting intelligent forecasts for your annual expenses budget. Different employees will travel in different ways, to different locations, and at different frequencies. However, having data on the average flight cost per mile, as well as the nightly hotel, average meal and ground transportation costs, will mean you can accurately predict and anticipate your expenses budget for the year ahead.
Setting expense limits
For the most part, business travellers want to do what’s right for their company – and many companies find that giving employees control over their own spend can actually reduce overspending. Find a happy middle ground by giving employees control while setting key limits.
For example, meal expenses can be set as an overall allowance per day, giving the employee the choice of how much to spend individually on breakfast, lunch and dinner.
When it comes to booking accommodation, give employees the choice of a standard room in any hotel of a certain star rating or a maximum price per night.
For ground transportation, a corporate travel policy should clearly advise employees to choose the most cost-effective method considering the journey time. Most business travellers will accept being restricted to flying economy on short-haul trips.
Handling expense claims
It’s important that business travellers have a clearly defined method of claiming back their expenses. Ask them to fill out an expense report for the date, amount, category, location and business purpose of their claim – and decide whether you’d like them to file receipts for all their expenses, or just ones that exceed a certain amount.
Give your employees a time frame for submitting expenses – this will help your business maintain a stable and accurate cash flow. Similarly, let them know when they can expect money to be credited back into their accounts. Depending on the amount spent, it might be a good idea to clarify who will approve their expenses in each case.
Setting up your guidelines and procedures
There is no one, uniform corporate travel policy. If your policy doesn’t fit with the nature of your organisation, it’s unlikely to ever meet the expectations of your stakeholders. Fundamentally, your travel policy and procedures must be adapted to your business’s culture, and be flexible around the needs of your employees, industry and economy. They also need to be widely circulated and understood.
Your guidelines and procedures will help your business travellers make decisions within the framework of your corporate travel policy. They should include procedures for all bookings – after all, it’s important that employees are clear on what is expected of them at every point of their business trip.
It might also be necessary to include a section about the consequences of not following the set guidelines and procedures.
Considering safety and security procedures
The safety, security and well-being of employees must be at the heart of every corporate travel policy. While they’re engaged in business travel, your employees are your responsibility, so it’s crucial your policy has procedures in place that can ably respond to personal risk, severe weather or political unrest in a foreign country.
Highlight how important it is that your employees read your corporate travel policy document for their own safety, and clarify what they need to do in an emergency situation and who to contact. If your employees are regularly flying out to high-risk countries, organise additional travel safety and security training. We work closely with International SOS to offer enhanced medical and security assistance, and keep your employees safe on the road.
Take a look at how else we’ll support your employees at every stage of their journey.
Delivering the travel policy to employees
Once you’ve written your corporate travel policy, you need to make sure your employees read and understand it. Whether you choose to deliver the policy in a printed document, via intranet or in an email, there are some general ways to make sure it’s communicated as effectively as possible.
