The world of work is evolving at an incredible pace, with global workforces and remote working becoming the new norm for many modern organizations. This unique landscape brings exciting opportunities and challenges—including managing travel and expense policies.
Companies traditionally calculated business travel’s return on investment by measuring financial gains. Today, a new understanding of ROI takes root beyond mere dollars and cents.
Companies are recognizing that business travel is more than just a financial transaction. Yes, it is crucial in building and strengthening relationships, closing deals, and driving revenues. It’s often repeated that companies realize $12.50 in incremental revenue and $3.80 in profits for every dollar invested in business travel.
But today, the intangible benefits—employee growth, productivity, satisfaction, mental health, sustainability efforts, industry networking, and more—are also part of the ROI equation.
In this new era, companies are taking a 360-degree view of travel and expense programs and their potential effect, recognizing that travel and expense policies can significantly boost or lower employee productivity, wellness, and satisfaction.
The impact of travel and expense policies on employee happiness
While many people perceive travel and expense policies as necessary administrative burdens, these policies can either improve or hinder the work experience.
These policies can reduce stress, promote fairness, and foster a positive work culture when managed well. When handled poorly, they can hurt morale, productivity, and even personal lives.
Let’s review some of the specific elements of travel and expense policies and how they can influence people in the workplace, either positively or negatively:
Reimbursement timelines
Late reimbursements are one of business travel’s most significant pain points. Professionals often have to shoulder substantial out-of-pocket expenses during their trips, expecting to be reimbursed by the company later. Delayed reimbursements cause financial stress for people, affecting their morale and productivity.
On the other hand, timely reimbursements reassure people that their financial well-being is a priority for the company. It also reduces the burden on employees and cultivates trust, allowing them to focus on their core tasks rather than worrying about reimbursement timelines.
Approval processes
Transparency is a cornerstone of effective travel and expense management policy. People need clear, comprehensive information about how the company will cover costs, how to file expense reports, and what travel to book.
When policies are vague, complicated, or poorly communicated, it can lead to confusion and frustration. Team members may feel uncertain about their rights and may worry about inadvertently violating company policy.
Conversely, transparent policies that are easy to understand and follow can significantly enhance employee satisfaction. When policies are easily accessible, people feel more confident and prepared, which lends itself to greater compliance with policies, reducing the chances of fraud or misuse of funds.
Allocation of funds
Inconsistency in fund allocation can lead to feelings of unfairness among employees. If some team members perceive that others are getting preferential treatment, or if there is a discrepancy between the actual costs of travel and the funds allocated, it can breed resentment and dissatisfaction.
Effective distribution of funds ensures all team members can access the resources they need to make their business travel successful. This approach demonstrates fairness, boosts morale, and promotes a sense of unity within the team.
Tackling these everyday travel and expense management issues is essential to foster employee happiness and productivity. It’s about striking a balance—ensuring that the company’s financial interests are protected while also meeting the needs and expectations of your people.
Most effective travel and expense policies
The most incredible business travel solution in the world will still be unsuccessful if no one in the organization wants to use it. A low business traveler adoption rate means organizations lose visibility and savings, and an inefficient travel program will harm overall company growth and culture, both of which impact hiring and retention.
Your goal should be 100 percent traveler adoption—and with company-wide employee input and HR team buy-in, that’s not just a pipedream.
An extensive study into happiness and productivity by Oxford University’s Saïd Business School found that workers are 13 percent more productive when happy. Research from the Global Business Travel Association (GBTA) found that the more satisfied travelers are, the more likely they are to follow company policy during a trip. Even something as routine as managing travel expenses isn’t just about the bottom line, it’s an essential way to improve the employee experience.
Incorporating the following six practices into your travel and expense policy can drastically drive adoption, savings, compliance, satisfaction, and productivity for a win-win across the board.
Hand out corporate cards. Providing your people with corporate cards gives them a sense of empowerment and reduces the financial stress often associated with business travel. Today, companies can hand out virtual and physical corporate cards to all team members worldwide thanks to robust, proactive policy controls enforced at the point of sale that eliminate out-of-policy spend before it happens.
Establish transparent and timely reimbursements. Implement a policy prioritizing prompt reimbursements to reduce the financial strain on people. Fintech continues to improve expense automation, empowering companies to reimburse employees for out-of-pocket spend within days—not weeks—across many countries and currencies.
Introduce dynamic and flexible policies. Rather than one-size-fits-all policies, provide flexibility based on the location, duration, and nature of the business trip—respecting individual needs and ensuring people stay within the budget even when faced with unforeseen circumstances or high costs in certain regions. Allow people to select their preferred flight times, seats, and hotels. Give your people the best options at the right time through the proper channels with contextual information to help them make smarter booking decisions.
Prioritize safety. A realistic duty of care policy goes hand-in-hand with effective travel risk management. Communicate with travelers, offer 24/7 support, and have a contingency plan if things go wrong.
Encourage bleisure and PTO. Bleisure travel (business + leisure) is on the rise as globalization, particularly of business and technology, enables individuals to travel for leisure while not sacrificing career success. The GBTA study mentioned earlier found that 89 percent of business travelers were at least moderately likely to extend a work trip for leisure.
Respect that business travel takes professionals away from their personal lives. Encourage work-life balance by allowing for leisure time during business trips—for example, an extra day for sightseeing or a policy covering cultural experiences’ expenses.
Communicate, communicate. Ensure travel and expense policies are easily accessible and understandable for all your people. Regular training or policy refreshers can ensure that everyone understands expectations and what they can expect from the company. This transparency builds trust and provides fair treatment.
People-first policies create a more engaged, happier workforce. And when they’re supported by robust technology, great policies can also lead to increased productivity and improved business outcomes.
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The role of trusted HR partners and reporting
A practical travel and expense policy uniquely positions HR professionals to guide internal and external stakeholders toward success and employee satisfaction. HR professionals who craft influential travel and expense programs can also demonstrate their strategic value through evidence-based reporting, which is critical in solidifying its organizational role.
What do these partnerships look like? By collaborating closely with managers, HR gains a direct line of sight into the day-to-day experiences and challenges of the employees, allowing leaders to tailor strategies and policies in real-time while also reacting swiftly and efficiently to emerging needs.
Likewise, HR’s relationships with tech providers can significantly affect the organization’s ability to implement effective policies. By collaborating with trusted tech partners, HR can leverage the latest solutions to automate tasks, streamline savings, and focus on higher-level strategic initiatives.
For example, real-time travel and expense insights can shed light on cost savings achieved through efficient management, improvements in employee satisfaction due to streamlined processes, or productivity increases linked to improved work-life balance.
Furthermore, sophisticated reporting that leverages data analytics can provide predictive insights and identify trends, empowering HR to be proactive rather than reactive. Analyzing expense data might reveal patterns in employee spending that could inform future policy adjustments.
Conclusion
Revamping travel and expense policies might seem daunting, but the benefits are undeniable. Creating people-first policies leveraged by the right technology and fostering strong partnerships can significantly boost employee satisfaction and retention while driving savings and efficiencies.
HiBob and Navan are here to help you streamline your HR processes and empower your team with the tools to succeed. So, let’s create the magic together. Let’s make work better.
