With so many business travelers going on business trips every year, companies must have a robust business travel policy in place. A well-defined travel policy will help business owners manage their expenses while ensuring employee satisfaction, safety, and productivity while on the road.
However, the question arises, what is the best approach you must opt for? A strict or flexible travel policy? In this blog, let’s understand what a strict and flexible travel policy is and its advantages and disadvantages.
Strict Business Travel Policy
A strict travel policy includes a set of rules and regulations that employees must follow during business travel. These rules are set in stone, and employees need to follow them without fail.
For instance, the policy may consist of the maximum amount your employees can spend on travel and accommodation, types of transportation they can use, incidental expenses, etc.
Flexible Business Travel Policy
A flexible travel policy, unlike a strict travel policy, gives your employees more autonomy while making travel arrangements. The policy may offer a more generous per diem or allow employees to book the airlines and hotels of their choice.
Advantages of a Strict Business Travel Policy
Let us see the advantages of a strict corporate travel policy:
1. Facilitates Cost Control
With a strict business travel policy, you can tightly control all the expenses incurred during a business trip. This includes travel, food, accommodation, and other travel-related expenses.
For instance, with a strict travel policy, your employees can be mandated to book flights well in advance. Moreover, you can also ask them to book from a defined list of hotels and flights to leverage deals and discounts. This helps you control travel costs and prevents employees from incurring additional expenses.
Additionally, employees may also have to submit all expense receipts during business travel. This will allow your travel managers or the finance department to verify if the costs are within the company’s budget and prevent any fraudulent claims.
2. Ensures Travel Policy Compliance
With a strict business travel policy, you can ensure policy compliance by setting clear and well-defined guidelines for all your employees. The policy outlines the company’s preferred vendors, employee booking procedure, the limit on expenses, and more. With such a policy, employees may have to take approval from higher authorities for airfare, rental cabs, accommodation, etc.
Moreover, the policy can also outline consequences for non-compliance. For instance, if your employees fail to comply with travel policies, they may be subject to disciplinary action. Hence, a strict travel policy ensures travel policy compliance.
3. Better Risk Management
When employees go on business trips, they can encounter various risks such as accidents, political and civil unrest, natural disasters, etc. In order to mitigate such risks, you, as a company owner, can protect your employees and minimize potential harm by implementing a strict travel policy that addresses these risks.
With a strict travel policy, you can implement a risk management plan. The employees and travel managers must adhere to the guidelines mentioned in the plan to ensure traveler safety.
Additionally, you can also conduct a pre-travel health assessment for every employee traveling. Per the policy, travel managers can also hand over a risk assessment checklist for employees to anticipate potential risks they may encounter during their business trip.
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Disadvantages of a Strict Business Travel Policy
Let’s see the disadvantages of a strict policy:
1. Limits the Autonomy
While a strict travel policy helps ensure cost control, policy compliance, etc., it also limits employees’ autonomy. Such rigid guidelines and procedures can restrict employees from booking flights and hotels of their choice.
Your employees may have to take approval for every expense and limit the types of transportation and lodging allowed. Such kinds of restrictions can limit employees from making their own decisions while managing their travel and expenses.
2. Difficulty in Adapting to Changing Situations
A strict business travel policy may not allow employees to adapt quickly to changing situations, such as changes in the local demographic. This can negatively impact the employees and the company.
For instance, if the policy allows employees to use a specific airline and that airline cancels the flight due to bad weather, then employees may be stranded in the airport for long hours. They have to wait until they book another flight on the same airline. This can cause a delay in business trips, leading to missed business opportunities.
3. Reduces Employee Morale
The main disadvantage of a strict policy is that it can reduce employees’ morale. When you closely monitor employees for every travel booking, they can feel dissatisfied with the job. This, in turn, can lead to a decrease in employee retention.
Advantages of a Flexible Business Travel Policy
Let us now see the advantages of a flexible travel policy:
1. Enhances Personalization
The new-age business travelers demand personalization while traveling for business. A flexible business travel policy can improve personalization by giving employees more control over their travel arrangements and preferences.
Here are a few ways a flexible travel policy can lead to more personalized travel experiences:
- Choice of travel options: Employees can choose their preferred travel options, such as flights, hotels, rental cabs, etc.
- Customized travel itineraries: With a flexible travel policy, employees can create or modify their own travel itinerary.
- Access to travel rewards: A flexible travel policy allows your employees to use their travel rewards, such as loyalty points and frequent flyer miles.
2. Improves Employee Satisfaction
A flexible business travel policy can positively impact your employees by enhancing employee satisfaction in several ways. Here are some of them:
- Reduced stress and anxiety: A flexible travel policy reduces employees’ stress and anxiety associated with business travel, such as booking flights and hotels of their choice. When your employees have more control over their travel arrangements, they feel happy and satisfied.
- Increased productivity: It can increase your employees’ productivity, as they can get to
choose travel options that work best for their needs. For example, employees can choose the most convenient flights or hotels to reduce travel time or choose a preferred mode of transportation that allows them to work on the go.
- Recognition of employee needs: A flexible travel policy shows that the company recognizes and values the needs of its employees.
3. Accommodates Bleisure
With a flexible travel policy, you can also accommodate bleisure. According to a study, most business travelers believe participating in a bleisure during a work trip makes them more productive.
When you incorporate leisure activities into a business trip, employees feel refreshed, energized, and motivated. Moreover, bleisure also helps employees reflect on their professional and personal lives, which can enhance their self-awareness.
4. Better Work-Life Balance
A flexible travel policy allows employees to balance their work and personal commitments better. It provides support for employees with families. For example, the policy may allow employees to bring their family members on business trips or provide travel allowances for family-related expenses.
Additionally, the policy also allows employees to explore new locations and visit family or friends during business trips. Hence, a flexible travel policy helps employees with better work-life balance.
Disadvantages of a Flexible Business Travel Policy
Here are some disadvantages of a flexible travel policy:
1. Challenges in Cost Control
A flexible travel policy allows employees to make their own travel decisions and arrangements. This can lead to a lack of inconsistency and increased costs. For instance, an employee may decide to book a flight at the last minute or book a hotel at a higher rate due to limited availability.
With such a policy, it becomes difficult for your travel managers or the finance team to track and monitor expenses. This can lead to overspending and difficulty reconciling expenses. For instance, employees may use personal credit cards or choose expensive options without proper approvals, increasing expenses.
2. Possibility of Policy Violation
With a flexible policy, there may be no clear guidelines or parameters for employees to follow while making travel arrangements. They may need help understanding the expectations or requirements of the policy, which can result in confusion and policy violations.
A flexible policy can also lead to misunderstandings between employees and management. For instance, employees may not be aware of the updates or changes to the policy, leading to unintentional policy violations.
3. Increased Administrative Burden
A flexible business travel policy can lead to increased administrative burdens for business travel management. When employees can choose their travel arrangements and expenses, it becomes difficult for companies to track and manage those expenses effectively.
For instance, employees may have different preferences for travel, such as transportation, meals, leisure activities, hotels, etc. The administration must review and approve the expenses for each, which can be time-consuming and complicated.
Implement the Right Business Travel Policy for your Business Needs
After understanding the advantages and disadvantages of strict vs. flexible business travel policy, it is time that companies implement the right travel policy. When you implement the right corporate travel policy, you can ensure a proper travel management process in your organization.
A better way to do this is by taking the help of a travel management company such as ITILITE. At ITILITE, we help you create robust travel policies in a way that will help you not only save costs but also make travel arrangements as per travelers’ preferences. Our travel management platform also automates most of your business travel process, which will help you save time and money.
Request a free demo to learn more about ITILITE’s advanced features.
