Strategy

Three Ways to Strengthen Your Travel-and-Entertainment Savings Program

How to encourage employees to book online and avoid travel agents.
Craig SchneiderSeptember 1, 2001

Cut unneeded travel-agent fees. Book online. Watch what you spend. The steps employees should take to keep a company’s travel and entertainment costs within bounds are simple enough. What’s not so simple is how employers can get corporate travelers to take those steps.

Do you issue a mandate stating outright that employees must book most travel online and use agents only for complex multiple-city or international trips? Do you try to persuade business travelers to follow company guidelines? Or do you offer incentives to change employee behavior? Here’s how three prominent companies get employees to adopt their T&E booking policies:

  • Charge fees on corporate cards. To teach employees how to use a new online booking tool and save the company money, the management of Honeywell International launched a Webcast program. Then executives drove the savings message home by implementing a point-of-sale transaction fee: When an employee uses a travel agent to make reservations, $30 — the difference in cost between booking through an agent and booking online — is printed on the employee’s company credit-card statement.

Jim Lee, director of global travel services at Honeywell, says that the tactic is an effective way of building employees’ awareness of how the new online tool is saving the company money.

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To be sure, management reimburses employees for the $30 fee. But educating employees about the added cost of using an agent was a key factor in boosting adoption rates from 15 percent to more than 50 percent in a three-week period last year, says Lee.

  • Interrupt phone calls to agents. Xerox has taken an extra precaution to make sure workers book online rather than call an agent and incur a $40 transaction fee. If employees call an agent, they first must listen to an announcement from Xerox senior management that “basically says you must use Xerox travel online for booking reservations,” notes travel services manager Pam Moll.
  • Before Xerox’s senior management decided to mandate the use of its online booking system in January 2001, they changed how employees update their travel profiles. Setting up a profile — which includes such information as an employee’s frequent-flier numbers and preferred bed size — is generally the first step in using a booking service.

    “This was a huge productivity issue,” says Moll. “The profile system at the agency was outdated.” Changes were being sent via snail mail or fax.

  • Issue monthly “peer pressure” reports. Unlike many companies this year, Cisco Systems executives are steering clear of mandating that employees follow corporate T&E policies and procedures. Instead, they trust that the “frugality” that permeates the networking-equipment giant’s culture will get managers and staff to do the right thing on their own, says Dennis Powell, Cisco’s corporate controller. Employees aren’t even required to have a manager approve their itineraries, he adds.
  • Still, Cisco executives aren’t shy about using a little embarrassment to make sure employees stay frugal about travel. They post a monthly “Lost Air-Savings Report” on the company’s intranet that shows the cost of not taking the lowest available fare. The report identifies specific individuals, the choices they’ve made online, and the explanations they provided for choosing higher-priced itineraries.

    “We report that on the Web for everyone to see,” Powell says. “So there’s a bit of peer pressure for that. You don’t want your name on the top of the list.”

    Cisco has saved about $8.5 million out of a total $100 million in travel expenses since implementing travel-booking software in September 1999, according to Powell. He says he’s also seen an 18 percent average reduction in the cost of tickets during that time.