Top Five KPIs to Test the Effectiveness of Your Travel Policy
You’ve considered the costs, and you’ve made smart travel booking decisions for your business. But now you need to know how to judge the long-term effectiveness of your corporate travel policy.
In our whitepaper, “Navigating the complex world of corporate travel – how optimization can positively impact your bottom line,” we laid out the ideal approach your business can take towards corporate travel and associated costs.
A corporate travel policy should scale down losses and temper operational inefficiencies, but it could be a fruitless exercise if you don’t measure the effect it has on the business as a whole. Knowing how and what to look for is an essential part of optimizing travel so you can set achievable targets.
Now you’ve emphasized the importance of more careful consideration of the travel policy; it’s time to set key performance indicators (KPIs).
Here, we’ve identified five measurable goals to help you define what a successful business travel policy can achieve.
Reduced travel expenditure
An overall reduction in business travel expenses should signal that delegates are thinking smarter about their corporate travel plans. A fully optimized business travel policy shouldn’t restrict employees too much, nor should it discourage them from making trips at all. Instead, your policy should guide them to think about when to make the most cost-effective bookings for meetings that are likely to bring a return on time and money investment.
Dividing the total business travel expenditure with the number of staff that are actively out in the field at client meetings or conferences will get you average expenses per team member, and comparisons for the coming years. It could also help you decide which of your employees are making the most significant returns, winning clients or signing deals, compared to the amount you have invested in their travel.
Tip: Always be on the lookout for a rates package or special discount available on your busiest travel routes; you could save even more by locking in a long-term deal provided you have ongoing business in your chosen destination.
The key to reducing overspending is to ensure that your employees are fully engaged in your travel policy. It’s hard to avoid the occasional last-minute booking, but by encouraging compliance to a streamlined travel policy, your biggest spenders will begin to make a conscious effort to keep their costs down by combining a savvy search for discounts with a more organized schedule. Identify areas where you could reduce expenses – for example by encouraging multiple meetings per trip and sending fewer staff to industry conferences.
Tip: Reward the employees who are the most focused on delivering savings – some companies award gift cards or even offer an ongoing rewards program which awards a percentage of the savings realized.
Year-on-year savings made
A year into your travel policy implementation, you should start to see some promising results as far as business travel expenses are concerned. But don’t panic if the trend doesn’t immediately present itself; your company is hopefully scaling up at a rate where more and more meetings are being arranged, and more business travel is being booked. Make sure to keep an eye on year-on-year comparisons and identify any trends there might be in the long term.
Strong employee satisfaction
While you’re carefully scaling back the costs on your most frequently-flown destinations, you should consider the needs of the travelers who make the journeys. As representatives of your business, they may see drastic cutbacks as demoralizing. Keep employees involved in the bigger picture, while recognizing the effort they put in to grow your business, and you have a better chance of retaining their stake in company success. Involving them in the development of your travel policies will help you better identify the issues around business travel and what is necessary to staff.
A satisfied employee will, in turn, be encouraged to work harder and smarter, and your business could reap the rewards.
Taking the above into consideration, a happier employee will be a more productive employee. If you have managed to streamline your business travel policy and its implementation, worthwhile trips will have quantifiable outcomes, and that will, in turn, raise morale. Traveling for business will be enjoyable rather than a burden, and that can only be a good thing for your business.
Schedule the reporting of these KPIs into your wider bi-annual or annual commercial appraisals, and use them as the means to evaluate your new business travel policy. This way you not only get a feel for the financial outlook but also how it affects employees and determines their level of engagement. An effective travel policy is critical, but knowing how to analyze the results of your travel policy could make the all the difference.
Download our whitepaper “Navigating the complex world of corporate travel – how optimization can positively impact your bottom line,” to find out how you can achieve desirable results by implementing changes to your corporate travel policy.