An employee is on a business trip. When the work day is over, she could return home with a flight departing at 5 pm, however the company travel policy for employees requires her to choose the lowest fare. So she has to wait until 8pm since that trip is 100 SEK cheaper. Is this a good or bad policy?
"This is a great example of a bad travel policy which is too rigid and does not take into account that the employee has a life outside his job," says Søren Hammer, Sales Manager at Eurocard.
He continues with another real life example:
"A classic mistake is to have a very complex travel policy that you expect employees to really read up on. The truth is that few, if anyone, does.
"Matters get even worse if the company demands that employees behave in a way that they simply won’t or can’t. Some take things as far as creating "black lists" where you can end up if you do not follow the policy," says Søren Hammer.
Frameworks create security
An overly strict travel policy, developed without the users in mind, can potentially damage the company. At the same time it is important to keep track of, and reduce, company costs.
"A good travel and expense policy is one that works well for employees while helping the company to keep costs down. This can be ensured by communicating what is ok and what is not. But above all why the travel policy exists," says Søren Hammer.
According to Søren Hammer, one way to make it easier for everyone is if the company is responsible for the employees' credit cards.
"With a credit card issued to the company, employees don’t have to worry about payments. And it is easy for the company to keep track of costs while deciding the framework that the cardholders should have. At the same time, the purchasing department gets a better understanding of where and how the company's money has been spent, data can be used to adapt the travel policy.
How do you know if you have a good travel policy?
According to Søren Hammer, it is important to investigate whether employees really follow the policy. For example, if you employ many suppliers outside the policy, it is a sign that it doesn’t work.
"A fair and transparent policy that can be complied to in a digital system will also be respected."
He emphasizes that there are also companies that try alternative travel policies – or simply do not have one.
"There are also costs associated with having a travel policy. It requires resources for internal governance, followup meetings with suppliers and so on."
Some companies choose to remove restrictions and instead control their use by collecting and analyzing the financial data.