Why Your Employees Keep Overspending on Travel

Your business has a travel budget — not that any of your employees seem to notice. Consistently, the workers you send on business-related trips are overspending on everything from hotel rooms to transportation to food and more. Why is this happening, and how can you make it stop?

Too often, leadership’s immediate response to overspending on travel is to slash travel budgets and place roadblocks like additional approval processes to limit who has access to business-sponsored trips. However, these inconveniences only serve to create friction between employees and leadership, and they can result in lower performance, less innovation and higher turnover. Instead of making business travel a burden, you should take the following steps to better manage travel spend.

Because They Don’t Know Better

In many cases, employees spend so much during business trips because they lack a practical tool for tracking their expenses while they are out of office. Workers might keep their receipts for the accounting department to tally up when they return from their travels, but few will bother to add up all that they have spent and compare it with the corporate travel policy. Worse, many companies neglect to draft travel policies to begin with, and some that do have unintentionally made their policies so difficult to comprehend that workers who try to follow the rules inevitably fail.

Your first objective in reducing your employee travel spending should be to draft a travel policy that is reasonable and comprehensible. You might gather together the workers who are most often sent on business trips to better understand their needs in regards to accommodations, transportation, food, tech, and other spend categories. Though it might be tempting to give high-level business leaders a bigger travel budget — so they might travel more comfortably — this could cause resentment to develop in the lower ranks. It is much smarter to keep travel spend relatively equal for every traveler in your business.

Next, you need to give your employees a means of logging and tracking their expenses. You can invest in a tool like Coupa Travel, which radically simplifies the exceedingly complex situation of travel spending. Travel spend management software can automatically capture all expenses related to a business trip and assemble relevant travel information, ensuring that workers have all their details in order before and during their trip. With insights from this type of digital tool, you can adjust your travel policies and programs to save money while increasing comfort and satisfaction.

Because They Want to

There is another, more insidious reason that your employees are overspending on their business trips: They don’t care about your budget. Whenever they can, workers will almost always prioritize their comfort and convenience during a business trip, especially when they know that you are footing the bill. One study found that the typical business trip costs 66 percent more than the typical leisure trip because most employees are not worried about the money they spend.

Fortunately, there is a way for you to change the way your workers think about travel and help your business save money. A practice called incentivized behavioral change allows you to alter how your workers perceive and interact with their travel budgets. It involves setting a maximum sum of money your travelers are allowed to spend on their trip — which might allow them to enjoy last-minute booking, business-class seats, deluxe accommodations, and more — and rewarding workers who do not spend to that maximum with the difference as a bonus. Over time, workers will look for ways to cut the costs of their business travel significantly, and these practices will become so ingrained that you can steadily lower the maximum to a more reasonable rate.

If you still are not satisfied with the high figure that represents your annual travel spend, you might need to rethink your travel policies. Given the connectedness of the world, you might be able to replace many business trips with video meetings or conference calls, or you might be able to send fewer workers on the same trip. However, before you make major changes to your business strategy, you should try retooling your travel policies, using travel spend management tool, and attempting incentives to slash costs.