When the economy is down, employers want to start reducing staff travel expenses; that’s a given.
But before you jump the gun and reduce your travel expenses, you should first look at all of your company’s expenses. This is very important.
There may be an opportunity to create a more positive work environment by sharing the company’s financial position with your employees. This is sometimes an uncomfortable thing for many small companies to do, but I think employers need to share:
- How the company makes money;
- What expenses the company is reviewing for possible reduction or elimination; and
- What the company needs are for attracting and keeping business.
Sharing this information with employees allows them to have buy-in for what your company is trying to accomplish. It will also help them to better understand why cut backs may be necessary.
The last thing you want to do is up and cut your company’s travel expenses before looking at what other expenses your company currently has.
Also, when you cut travel expenses and don’t have a written policy related to the same, it could harm your business in terms of preventing travel that’s necessary or treating employees differently in the same situation.
Steps to Effectively Reduce Staff Travel Expenses
Here are some general steps to help in reducing your company’s travel expenses:
- Start with an explanation—It pretty much goes without saying in this economy that everyone is dealing with financial circumstances. However, providing an explanation to your employees will help them understand why reducing staff travel expenses is necessary.
In my opinion, communication, in general, with employees is important. Explain that “This is how we do business,” and then ask for suggestions for other things that might work for the business.
- Ask and encourage employee feedback—Your employees may have ideas for how to reduce your company’s expenses: both travel expenses and expenses as a whole. Ask them for their suggestions!
- Ensure employees’ business can still be done without traveling—Some employees may worry that business will suffer if they can’t travel as often, so you’ll need to reassure them with some tools and options for doing business-as-usual effectively.
For example, rather than traveling for meetings, companies can use internet-based programs to conduct teleconferences via the phone and/or the Internet.
- Develop a staff travel policy—To do this, you should step back and first take an inventory of your current travel expenses. Where are people going? How often? Where are they staying? How much are they spending?
Once you look at all of the above, you’ll have a complete picture of your expenses which will help you to trim appropriately, rather than just slashing across the board.
An Example
I once worked with a company to help them reduce their travel expenses, particularly those expenses related to travel by hourly employees.
The company had to pay the employees for the hours they spent traveling, as well as for all the hours they spent working on the trip. This resulted in an increase of overtime payments. The company decided to limit travel to exempt employees as a way of reducing staff travel expenses.
In situations where companies want to reduce travel expenses, I always suggest looking at their employee handbook to define travel expenses and the portion of such expenses, if any, that are the responsibility of employees.
In my opinion, employers need to be conscious of the costs to travel, so they need to choose less expensive alternatives when they can. An example of this would be finding a travel agency to assist with tracking costs and finding the least expensive travel packages and deals.
Whether it’s a down economy or an up economy, companies may want to consider being more transparent with employees about some of their operating costs. Companies should also be more aware of how much they’re spending and what they’re spending it on.
Keeping costs low wherever possible will help your company avoid having to make across the board cuts when the economy isn’t so good.