Seems everybody’s looking to increase their savings in the travel category these days. If you’re sourcing travel, you know how important it is that travelers comply with your firm’s travel policies. It is essential that they buy travel from your preferred suppliers. This is the key to getting and keeping good discounts.
The question many firms consider is whether they’ll get higher compliance by using sticks or carrots. Most come down on the side of sticks. I’ll write about the kinder, gentler carrots in the near future.
Here are five travel policy compliance “sticks”, from lightest to heaviest:
- Internal benchmarking of compliance and costs
- Intimidating exception approval path
- Slow reimbursement for out-of-policy purchases
- Lists of Shame
- Non-reimbursement for out-of-policy purchases
Some comments on each of these:
Internal benchmarking of compliance and costs can be a really good way to apply executive peer pressure. You need to roll up individual compliance stats and travel costs by department or business unit. This can be a chore unless you have a good travel policy compliance and data reporting systems. But assuming you do, all you have to do is publish a few simple metrics for each business unit, and let executive pride take over from there.
Intimidating exception approval paths are simple, highly effective and remarkably low-touch. You need a well-respected (and preferably powerful) senior executive to take on the duty of “exception approver”. (Don’t worry, he or she won’t have to do much if they play their cards right at the beginning.) Travelers are told that if they want to book anything out of policy, no problem – as long as the Senior Executive OK’s it…and here’s the phone number. The SVP needs to quickly get a reputation for not approving exceptions, and then it’s a walk in the park.
Slow reimbursement for non-compliant purchases takes a passive-aggressive approach. Your expense reporting process queues a traveler’s non-compliant purchases for a painfully-delayed reimbursement, say 90 days slower than the approved reimbursement cycle.
Lists of Shame report the names of travelers who failed to comply with travel policies. The lists are circulated among middle and senior management on a regular basis. The key is making sure that the senior executives comply with policy and keep their names off the list. Yes, senior management has to walk the talk to make this one work.
Non-reimbursement for non-compliant purchases are the most drastic, short of termination. I’d bet there are legal implications with this policy, so be careful if you want to use it.
There are lots of way to get good compliance with a well-written travel policy. If you have a success story, please share it here!