5 Ways to Cut Invisible Spend
Making The Invisible, Visible: 5 Ways to Cut Invisible Spend
Being an effective travel manager means handling the complexity of dozens, hundreds, or sometimes even thousands of constantly moving employees. And for every travel manager, efficient, comfortable travel for each employee is the foremost priority. After all, a comfortable employee — especially those who travel often — are able to be far more productive in the long run.
As a Travel Manager you know that coordinating corporate travel means not only juggling all their employees travel needs, but also each employee’s habits and preferences. Add to that the increasingly connected and complex nature of business travel and you have a sour tasting recipe that can affect the company’s bottom line negatively.
Now more than ever, travel managers and the companies they work for are more prone to invisible spend. It’s a difficult, hard to grasp problem defined as any expense made outside a company’s pre-defined travel policy. Invisible spend exists due to a lack of visibility and control. This can result in a disruption of financial and accounting operations along with duty of care and supplier contract commitments. Everything from accurate numbers — crucial to the compliance of legal accounting obligations — to the safety and well-being of a traveling employee are all put at risk through the invisible spend. As a matter of fact, it’s so common that chances are you and the company you manage travel for are affected by it to some degree.
So, what can you do about it? Check out five instances of invisible spend below and our tips on how to address them:
So many apps!
Convenient apps and services for employees may be inconvenient for employers
Services like Uber and other similar Apps are being used more often for business purposes because of their convenience and familiarity to the traveler. But while they may fulfill employee demand for more options, they often lead to far more frequent opportunities — both before, during and after business trips — for invisible spend to occur. For a travel manager, the avalanche of airport, hotel, and transportation apps all seeking to cultivate a direct relationship with their employees tempt them to make decisions counter to the interests of a company — all without data capture to boot.
Employing the use of a digital travel platform has the benefit of unifying the modern yet disparate business travel experience by connecting all of the apps and services together. As a result, these apps and services can be easily pre-approved and the data they generate can be used to improve future decisions. The challenges that stem from the difficulties of a more digitally autonomous employee need not be challenges at all!
Don’t be late!
Booking early is a necessity, not an option
According to a study by corporate-travel firm Carlson Wagonlit Travel, women who travel for business plan further in advance than their male counterparts, saving employers big bucks. On average, women book two days earlier. While that might not seem like a big difference, the study concluded that a company with 21,000 traveling employees could save $1 million dollars if men booked as early as women.
Now, we’re not saying don’t let your male employees fly or anything like that. Rather, use this information to your advantage to help influence your employees to book in a more timely fashion to save money. Sometimes, a little bit of psychology can go a long way with finding the right way to go!
Make a decision and stick with it
Fickle bookers equal costlier business trips
As we mentioned in our previous post, small business employees usually spend more on a business trip than when they travel for leisure. That also extends to the actual bookings themselves, with instances of changes or cancellation in flight and hotel reservations all too common. This can be a big problem for companies as changes and cancellations are notorious for being expensive.
To address this, some digital travel solutions use colour-coded booking calendars to better indicate the best time to book a certain flight to employees — a smart, simple way to cut those unnecessarily extravagant costs.
Everyone has their favourites
Employees always seek the benefits of the services they possess
The previously mentioned preferred apps and services problem is one that extends to things like cards that grant points and miles for using certain airlines, hotels and transportation services. Obviously, employees will gravitate to using those if they have the option. Unfortunately for most companies, those airlines, hotels, and transportation services are often a lot more expensive.
A digital corporate travel booking solution can help build and maintain a stronger culture to saving money by making a travel manager’s job easier. By employing its use, budgeting and cost control can be handled much easier versus traditional booking method with corporate travel agencies. And if handled well enough, employees may still be able to ride on the airline of their choice!
Transportation can be tricky
Taxis aren’t the only option available in most places
Due to their extreme convenience, taxis are usually the go-to mode of transportation in a new city. It’s not surprising that’s the case: in a foreign city, the very first thing most traveling employees see when they exit an airport is a row of taxis waiting to take them wherever they need — no prior research needed. While this may save employees a lot of time, this is not the most cost effective way to get them around, costing your company so much more in expenses in the long run.
Luckily, this instance of invisible spend has a pretty easy fix: simply inform your employees about the myriad of options most cities offer when it comes to public transportation. Doing this along will go a long way in making them more confident in taking it!