Business travel is like the grown-up version of your birthday party at Chuck E Cheese.
When you’re spending other people’s money, and you can order whatever you want off the menu, life is a whole lot more fun. For your employees, anyway. For you, it means a growing expense that shows less and less return on investment.
As a small business, you can’t afford to let employees run wild, even the really good ones. The problem is, to retain the best people in fields like sales, you’re going to have to let them stay somewhere nicer than the Super 8. So you need to get employees motivated to save you money, and getting someone excited about saving somebody else money so they can’t travel as well is about as easy as getting someone really PUMPED for a root canal.
But there are ways, and some top minds in the tech and travel worlds are finding them.
Google – a business slightly larger than yours – actually had this same problem as they went from large company to global goliath back during the mid-2000s. And thanks to their already-industry-leading algorithmic technology, they developed a system that found the fair market price for a given business trip given the nature of the trip.
Google has negotiations with suppliers and employs a travel company, and has contracted partners with whom they work. Their travel and expense department sets a budget, and lets employees choose whatever business travel option they want within that budget. Seems pretty simple, but then again Google is a large company and can get deals that your small business probably can’t.
The guy who runs Google’s successful plan – Travel and Expense Manager Michael Tangney – knows his plan isn’t optimal for a small business. But he also knows his technology can help you. So he’s assisting a startup called Rocketrip – and its CEO Dan Ruch – to implement programs that can help small businesses get their employees motivated to save money on business travel.
Here’s how it works:
Rocketrip uses an algorithm – that may or may not be similar to Google’s algorithm – to find the optimal price for a given business trip.
First, it takes into account your company’s budget, and the level of travel you typically allow for your employees. So if they fly coach and stay at 3-star hotels, your results will be different than a company that insists on car rentals and stays at motels.
Next, they combine this information with real-time data on current airfares, hotel rates, rental car rates, bus fares, gas prices or whatever other current prices factor into the cost of a trip. This saves you the hassle of having to rebudget as fuel prices drop or hotel rates spike during high season. Once combined, they develop the fair cost of a business trip given your corporate culture.
And here is where the fun begins: Your employees log into Rocketrip’s system with their schedule and needs and receive their meticulously-calculated budget.
Then employees can shop wherever and however they want for their trip. So if they’ve got an uncle who gets a friends and family rate at the Tulsa Marriott, they can use that. If they get free rental cars in Sacramento, go for it. If they can stay in their parents’ basement in Orange County, they’re free to do that too.
Because however much under that pre-stated budget their trip costs, they get a share of.
So say a 4-day business trip to New York was budgeted at $1400, and they only spend $800, that $600 difference is split between the business and the employee. This can either be in the form of cash, gift cards or other rewards for keeping costs down.
And it works.
In a trial reported by Inc.com, Glen Beck’s publication The Blaze tried out Rocketrip for 90 days and ended up saving about 29% over what the company had paid on travel and entertainment (T&E) expenses the year prior.
Cutting your T&E budget is certainly another option, and one that will get the results you’re looking for. At least in the short run. But when employees are forced to take unpleasant flights, stay in inconvenient hotels, and drive cramped cars their motivation to work for you will wane. And with that, so will employee loyalty.
By giving them a fair price to work with and an incentive to come in below that price, you can keep employees happy while still making some budgetary headway. This is by no means something you can’t do yourself either, but the time and research involved in setting your parameters may prove more that the savings is worth.
Yes, Rocketrip takes a cut of your business travel savings. Nothing in this world is free. But it is, if nothing else, an interesting alternative from some creative minds that might save your company some serious money on business travel.