BTN Europe presents an overview of business travel and MICE predictions for this year
Thursday 9th September, JW Marriott Grosvenor House
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ExCeL London - 30 Sep - 01 Oct 2021
Our industry has built a strong body of knowledge on which many best-practices have been founded. Travel is a mature expense category with proven management tactics. These practices will continue to deliver solid value.
But after 20 years, this mastery of procurement principles and travel policies leaves little room for creating new value. The year-on-year value from traditional travel management is still positive, but getting smaller each year.
However, ‘traveller friction’ is a new frontier. Conquering it has the potential to deliver significant new value to the travel category, and to give pioneering travel managers a much more strategically important role in their organisations.
Traveller friction is the wear-and-tear that travellers incur from taking trips. It is the negative consequence of too much travel, and of poor quality travel. It is a cause of lower productivity and engagement, reluctance to travel and higher health costs.
Perhaps, most importantly, it is a cause of staff turnover, aka attrition. Replacing a burned-out road warrior is incredibly expensive – not only recruiting and training costs, but the time needed to find a replacement can mean significant lost revenue for many firms. Traveller friction is clearly an HR cost. It is much harder to quantify than the procurement-based costs of an airline ticket or hotel room. And yet it is vital to do so. Only by recognising the cost of traveller friction can a travel manager credibly claim to optimise the category’s total cost.
Is traveller friction really that important? If so, why haven’t travel managers been taking its costs on board? In fact, they have been since day one – it’s just that they have just done so intuitively, using anecdotal evidence and good judgment. Otherwise, all firms would send the road warrior sales rep to Sydney in economy. He or she would stay in the cheapest motel, meeting the minimal safety standards, and would be told to take a bicycle to meetings.
Instead, travel managers use their good judgment to strike the balance between the lowest-possible procured travel costs, and their implicitly high traveller friction costs. The art of setting a travel policy is really the art of balancing these two opposing costs.
To date, procurement has had the stronger business case – with the advantage of clearly visible supplier costs. The HR case tends to be more subjective, so often seen as weaker. No surprise that travel policies at many companies are heavily tilted toward those which result in lower procured travel costs. In a fact-based world, the side with the better numbers often wins.
Improving HR's fact base
The two major consequences of traveller friction are lost productivity and higher attrition. New efforts are underway to quantify these costs. By doing so, they will give travel and HR managers a stronger fact base from which to make better travel policy decisions.
Carlson Wagonlit Travel (CWT) studied the travel experiences of over 6,000 travellers to quantify the elements of a trip that cause the most stress. CWT’s Travel Stress Index identifies 33 stress triggers, and quantifies the lost time and productivity associated with these elements. CWT developed recommendations for addressing specific demographics, with the goal of significantly improving traveller productivity.
My firm, T Clara, is focusing on the attrition costs of too much travel. We have scored over a million trips using what we call Trip Friction points, which are assigned to the traveller’s itinerary elements, such as number of flight hours per cabin class, number of work and weekend nights away from home, time zones crossed and so on.
Our Trip Friction database covers over 100,000 travellers from firms in Europe and the US. As a result, we know what high, and very high, levels of traveller friction look like for a broad spectrum of travellers. Our next step is to correlate those high levels of Trip Friction with employee turnover, and to quantify the cost of that travel-related turnover. These new metrics are clearly focused on building a stronger HR-oriented fact base for travel category managers. But new metrics alone will not be enough to create new value.
Bringing new traveller friction data into play is a terrific opportunity for travel managers to take on a more strategically valuable role. Why? Because the acceptable cost of traveller friction must be decided by senior management. Quantifying this is beyond the remit of most travel managers. HR must be involved to provide the attrition data, and finance will likely need to attest to the cost of lost productivity and higher attrition. Travel managers will contribute traveller data and cost estimates of new travel policy options, of course.
But the point here is that analysing the cost of traveller friction, and then taking decisions to optimise travel policies in this new light, requires a broader and much more strategic view of the travel category.
This gives the proactive travel manager licence to lead this initiative. Who else would – or should – tackle this important issue? While the initiative to integrate traveller friction costs is clearly cross-functional, it should be the travel manager who tees up and leads it. By doing so, travel managers can become successful pioneers, bringing new value to the category.
For more information on the topic visit tclara.com