Employees on the Road Can Drive Your Bottom Line
Establishing company travel policy,
perks
Employees on the road can drive your bottom line
January 3, 2000
Web posted at: 10:04 a.m. EST (1504 GMT)
In this story:
Create links in the travel industry
Popular travel perks
When employees disobey
RELATED STORIES, SITES
(womenCONNECT) -- If travel is becoming a bigger part of your business,
take heed: Unless it's tracked closely, it can hurt your bottom line,
particularly in a small business.
Travel and related expenses account for 7 percent of companies' total
operating costs, according to American Express' 1999 travel-management
survey. Only payroll and data processing are larger controlled expenses.
While American Express surveyed the largest United States and global
companies, its lessons apply to small- and mid-size businesses, too.
"Business travel, on average, is the third-largest expenditure for any
corporate enterprise," says Marianne McInerney, director of
communications for the National Business Travel Association in Alexandria,
Virginia. "This rule applies to startups as well as the Corporate 100."
Given its potential impact on sales and income, companies need to track
their travel expenses and have a consistent travel policy as soon as possible.
Size doesn't matter.
"It's never too early to develop a corporate travel policy or to set up
relationships with preferred air carriers, hotels or car rental companies,"
McInerney says. "All travel suppliers are very aware that today's startup can
quickly become tomorrow's AOL."
If you don't have a travel policy or aren't happy with your existing one, a
little analysis is in order. Review your past travel assignments with an eye
toward volume and patterns. Does most of your travel fall in the last week of
the month? Do employees go to the Northeast most often? How many trips
does your staff make each year?
Create links in the travel industry
Armed with the answers to those questions, you can approach airlines and
other service providers and try to negotiate a preferred rate. More than 88
percent of Fortune 1000 companies have preferred relationships, McInerney
says. Smaller companies should forge them once travel expenses make up 3
percent of their annual budgets.
"The most effective systems all rest on the ability of the company to bundle
its travel volume together," McInerney says. "The most effective companies
know how often they travel, to what cities or countries and how much they
spend."
Companies also should find a single travel agency to partner with,
McInerney says, "so that you can begin to track and analyze your travel
volume and policies."
Besides arranging preferred-rate packages with airlines, rental car
companies, hotels and other service providers, you need to figure out how
much employees will be allowed to spend on business trips. You also need
to decide what extra benefits -- if any -- traveling employees will get.
Popular travel perks
The Society for Human Resource Management began tracking business
travel benefits this year. The most popular ones offered:
Frequent-flier miles. Some 85 percent of society members
surveyed said they let traveling employees keep the frequent-flier
miles they amass.
Long-distance calls. Most companies pay long-distance charges if
an employee calls home while on a business trip. Most also put a limit
on how long employees can talk.
Other benefits offered, albeit less frequently:
Paying for an employee's dry cleaning while she's on the road.
Giving comp time for travel.
Paying for an airline club membership.
Paying exercise facility fees.
In addition to setting expense guidelines and summarizing on-the-road
benefits, a corporate travel policy should make clear how employees will be
reimbursed for the expenses they incur. Among your choices:
Provide a per diem -- either the same amount for all traveling
employees or a sum that varies according to an employee's
management level.
Ask employees to use their personal credit cards, then reimburse
them.
Ask hotels and airlines to bill your company directly.
Issue a corporate credit card for expenses.
The travel association recommends the latter -- a suggestion echoed by
American Express. Its travel-management survey shows corporate cards are
seen less as a job perk today and more as a way to cover traveling
expenses.
When employees disobey
Unfortunately, you'll always find employees who don't read your travel
policy or who ignore it. Many companies audit expenses to guard against
false claims, American Express says. Employees who don't follow travel
guidelines may face sanctions, salary deductions or letters of reprimand.
If those actions sound too harsh, you still have recourse. "A good travel
policy is never punitive," McInerney says, "although many companies today
will not reimburse travel that has not been arranged within the parameters of
the policy."
Whether you're just introducing a formal policy or revamping your existing
one, you need to let employees know what you're doing and why. Explain
that monitoring costs is a way to increase corporate health and not an effort
to stifle traveling employees. Make sure, too, that you have the support of
your management team so everyone gives the same message.
"The key," McInerney says, "is strong education, constant reinforcement and
helping the employee understand the impact to the company."
A Guide for International Business Travelers
Officials of companies that are successful in selling overseas often tell Business America that one of
the keys to their success is frequent travel to overseas markets. As in domestic business, there is
nothing like a face-to-face meeting with a client or customer. Business travel abroad can locate and
cultivate new customers and improve relationships and communication with current foreign
representatives and associates.
The following suggestions can help officials of U.S. companies prepare for a trip. By keeping in mind
that even little things (such as forgetting to check foreign holiday schedules or neglecting to arrange
for translator services) can cost time, opportunity and money, a firm can get maximum value from its
time spent abroad.
Planning the Itinerary
A well-planned itinerary enables a traveler to make the best possible use of time abroad. Although
travel time is expensive, care must be taken not to overload the schedule. Two or three definite
appointments, confirmed well in advance and spaced comfortably throughout one day, are more
productive and enjoyable than a crowded agenda that forces the business person to rush from one
meeting to the next before business is really concluded. If possible, an extra rest day to deal with jet
lag should be planned before scheduled business appointments. The following travel tips should be
kept in mind:
The travel plans should reflect what the company hopes to accomplish. The traveler should
give some thought to the trip's goals and their relative priorities.
The traveler should accomplish as much as possible before the trip begins by obtaining names
of possible contacts, arranging appointments, checking transportation schedules and so on.
Important meetings should be confirmed before the traveler leaves the United States.
As a general rule, the business person should keep the schedule flexible enough to allow for
both unexpected problems (such as transportation delays) and unexpected opportunities. For
instance, accepting an unscheduled luncheon invitation from a prospective client should not
make it necessary to miss the next scheduled meeting.
The traveler should check the normal work days and business hours in the countries to be
visited. In many Middle Eastern regions, for instance, the work week typically runs from
Saturday to Thursday. In many countries, lunch hours of two to four hours are customary.
Along the same lines, take foreign holidays into account. Business America at year-end
publishes a list of commercial holidays observed in countries around the world for the
following year. The potential U.S. traveler also should contact the local Commerce
Department district office (see listing on inside back cover) to learn what travel advisories the
U.S. Department of State has issued for countries to be visited. Each district office maintains a
file of current travel advisory cables, which alert travelers to potentially dangerous in-country
situations. The Department of State also has a telephone number for recorded travel
advisories, (202) 647-5225.
The U.S. business person should be aware that travel from one country to another may be
restricted. For example, a passport containing an Israeli visa may disallow the traveler from
entering certain countries in the middle East.
Other Considerations
Travel agents can frequently arrange for transportation and hotel reservations quickly and efficiently.
They also can help plan the itinerary, obtain the best travel rates, explain which countries require
visas, advise on hotel rates and locations and provide other valuable services. Since travel agents'
fees are paid by the hotels, airlines and other carriers, this assistance and expertise may cost nothing.
The U.S.traveler should obtain the necessary travel documents two to three months before
departure, especially if visas are needed. A travel agent can help make the arrangements. A valid
U.S. passport is required for all travel outside the United States and Canada. If traveling on an old
passport, the U.S. citizen should make sure that it remains valid for the entire duration of the trip.
Passports may be obtained through certain local post offices and U.S. district courts. Application
may be made in person or, in some cases, by mail. A separate passport is needed for each family
member who will be traveling. The applicant must provide (1) proof of citizenship, (2) proof of
identify, (3) two identical passport photos, (4) a completed application form and (5) the appropriate
fees. The cost is $55 per passport ($30 for travelers under 18) plus a $10 execution fee for
first-time passports or travelers applying in person. The usual processing time for a passport
(including time in the mail) is three weeks, but travelers should apply as early as possible, particularly
if time is needed to obtain visas, international drivers licenses or other documents. Additional
information is available from the nearest local passport office or by calling the Office of Passport
Services in Washington, D.C., (202) 647-0518.
Visas, which are required by many countries, cannot be obtained through the Office of Passport
Services. They are provided for a small fee by the foreign country's embassy or consulate in the
United States. To obtain a visa, the traveler must have a current U.S. passport. In addition, many
countries require a recent photo. The travelers should allow several weeks to obtain visas, especially
if traveling to Eastern Europe or developing nations. Some countries that do not require visas for
tourist travel do require them for business travel. Visa requirements may change from time to time.
Requirements for vaccinations differ from country to country. A travel agent or airline can advise the
travelers on various requirements. In some cases, vaccinations against typhus, typhoid and other
diseases are advisable even though they are not required.
Business Preparations For International Travel
Before leaving the United States the traveler should prepare to deal with language differences by
learning whether individuals to be met are comfortable speaking English. If not, plans should be
made for an interpreter. Business language is generally more technical than the conversational speech
with which many travelers are familiar; mistakes can be costly.
In some countries, exchanging business cards at any first meeting is considered a basic part of good
business manner. As a matter of courtesy, it is best to carry business cards printed both in English
and in the language of the country being visited. Some international airlines arrange this service.
The following travel checklist covers a number of considerations that apply equally to business
travelers and vacations. A travel agent or various travel publications can help take these
considerations into account:
Seasonal weather conditions in the countries being visited. World Weather Forcast
Health care (e.g., what to eat abroad, special medical problems and prescription drugs).
Electrical current (a transformer or plug adapter may be needed to use electrical appliances).
Money (e.g., exchanging currency and using credit cards and travelers checks) International
Dialing Codes
Using your computer modem abroad. What you need to hook up your modem just about
anywhere!
Cultural differences. Refer to Business Etiquette Briefings
Tipping (who is tipped and how much is appropriate). Refer to Business Etiquette Briefings
U.S. Customs regulations on what can be brought home.
Assistance from U.S. Embassies and Consulates
Economic and commercial officers in U.S. embassies and consulates abroad can provide assistance
to U.S. exporters, both through in-depth briefings and by arranging introductions to appropriate
firms, individuals or foreign government officials. Because of the value and low cost of these
services, it is recommended that the exporter visit the U.S. embassy soon after arriving in a foreign
country.
When planning a trip, business travelers can discuss their needs and the services available at
particular embassies with the staff of the local Commerce district office. Also it is advisable to write
directly to the U.S. embassy or consulate in the countries to be visited at least two weeks before
leaving the United States and to address any communication to the commercial section. The U.S.
business traveler should identify his or her business affiliation and complete address and indicate the
objective of the trip and the type of assistance required from the post. Also a description of the firm
and the extent of its international experience would be helpful to the post. Addresses of U.S.
embassies and consulates are provided in Key Officers of Foreign Service Posts, a publication
available from the Superintendent of Documents, U.S. Government Printing Office, Washington,
D.C., 20402-9371; telephone (202) 783-3238. The cost for this publication is $5 for one year and
it is issued twice a year.
A program of special value to U.S. business travelers is the Department of Commerce's Gold Key
Service, which is custom tailored to U.S. firms visiting overseas markets. This service combines
several forms of Commerce assistance, including agent and distributor location, one-on-one business
counseling, prescheduled appointments with key contacts and U.S. embassy assistance with
interpreters and translators, clerical support, office services and so on. The service is not available in
all markets and may be known under a different name in some countries (e.g., RepFind in Mexico).
Further information and assistance are available from any Commerce district office.
Carnets
Foreign customs regulations vary widely from place to place and the traveler is wise to learn in
advance the regulations that apply to each country to be visited. If allowances for cigarettes, liquor,
currency and certain other items are not taken into account, they can be impounded at national
borders. Business travelers who plan to carry product samples with them should be alert to import
duties they may be required to pay. In some countries, duties and extensive customs procedures on
sample products may be avoided by obtaining an ATA (Admission Temporoire) Carnet.
The ATA Carnet is a standardized international customs document used to obtain duty-free
temporary admission of certain goods into the countries that are signatories to the ATA Convention.
Under the ATA Convention, commercial and professional travelers may take commercial samples;
tools of the trade; advertising material; and cinematographic, audiovisual, medical, scientific or other
professional equipment into member countries temporarily without paying customs duties and taxes
or posting a bond at the border of each country to be visited.
Countries are continuously added to the ATA Carnet system. The traveler should contact the U.S.
Council for International Business to determine if the country to be visited is a participant.
Applications for carnets should be made to the same organization.
A fee is charged, depending on the value of the goods to be covered. A bond, letter of credit or
bank guaranty of 40 percent of the value of the goods also is required to cover duties and taxes that
would be due if goods imported into a foreign country by carnet were not reexported and the duties
were not paid by the carnet holder. The carnets generally are valid for 12 months.
To obtain a Carnet, dial Carnet headquarters at (212) 354-4480; 1-800-CARNETS (for the office
nearest your calling number); or 1-800-ATA-2900 (Carnet Helpline). The Roanoke Companies, an
authorized issuing agent of the U.S. Council, has Carnet issuing facilities in New York, Los Angeles,
Chicago, San Francisco, Boston, Baltimore, Miami and Houston.
Cultural Factors
Business executives who hope to profit from their travel should learn about the history, culture and
customs of the countries to be visited. Flexibility and cultural adaptation should be the guiding
principles for traveling abroad on business. Business manners and methods, religious customs,
dietary practices, humor and acceptable dress vary widely from country to country. For example,
consider the following:
Never touch the head of a Thai or pass an object over it; the head is considered sacred in
Thailand.
Avoid using triangular shapes in Hong Kong, Korea and Taiwan; the triangle is considered a
negative shape.
The number 7 is considered bad luck in Kenya and good luck in the Czech Republic, and it
has magical connotations in Benin. The number 10 is bad luck in Korea and 4 means death in
Japan.
Red is a positive color in Denmark, but it represents witchcraft and death in many African