Most employees tend not to worry too much about saving their company money when it comes to business travel. They can just expense everything--why should it matter to them? So maybe they don't book until right before the trip, meaning that prices are probably higher. Or they opt for the pricier hotel. Either way, it can end up costing companies a pile of money.
That's why it makes sense to incentivize your employees for saving your money. Google realized this early on and instituted a program that rewards its employees for booking cheaper flights and hotels on the company's dime. Googlers book travel using a tool that the company created that gives price parameters. The company still works with travel agencies and offers a corporate card, but it doesn't mandate that its employees use them.
One of the people behind this new outlook on business travel, Google's global travel manager Michael Tangney, says that businesses need to revisit their corporate business travel policy to meet the changing needs of employees.
"Everyone buys their flights by doing search, whether you're looking on Kayak or Orbitz or Flight Search or any of the other tools out there. That's how most people start their trip now, and if the agencies don't match up, they're happy to book directly," Tangney says. "And they think they're doing the right thing by saving their company money, which usually they are."
The problem is that it's a vicious cycle because as more of your employees book on their own, your corporate deals aren't as good because of the lower demand. Then the employees book through your corporate deals even less, and the deals just keep getting worse.
That's why Tangney suggests companies redesign their business travel policy to give employees more freedom. At the same time though, you still want to have a good sense of how your employees are spending your money. That's where an incentive platform like Rocketrip is useful.
Rocketrip will provide your employees with travel budgets based on your custom criteria combined with real-time market pricing data. Then if your employees beat the budget, they are rewarded with gift cards at more than 20 different vendors like Amazon and Bed Bath & Beyond.
Rocketrip was inspired by Google's program, and Tangney is helping out the startup as a strategic adviser.
"It reduces the cost of travel for the company and creates a culture of cost sensitivity that companies get excited about," Rocketrip CEO Dan Ruch says. "It's very difficult to encourage employees to save. They're not traveling on their own prerogative, they're leaving their families for days on end, and they're going to take liberties with the company travel policy because there's no reason not to. If they can fly business class, who in their right mind would choose coach?"
According to Rocketrip, Glenn Beck's publication TheBlaze decided to try out the company's program for a 90-day pilot. During the period, employees booked 240 trips, and TheBlaze saved $44,769--42 percent from flights and 55 percent from hotels. That translates into 29 percent year-over-year savings on travel spend.
But Tangney emphasizes that it goes beyond just the savings. By incentivizing employees to use a platform like Rocketrip, companies gain more insight into how their employees are booking travel plans.
"If you have a complete free-for-all, say you can do what you want, you don't get any visibility," Tangney said. "If someone goes onto Southwest and gets a ticket, you don't have any information on that trip. You know you spent $97 on the flight but you don't have any flight details."
So how do you encourage employees to save money while at the same time monitoring how the company's dollars are spent? "Encouraging people to do their search and find the best deals, saying 'The option I'll take is this one because it comes in $200 under my target, and then I'm going to get X amount of value [for myself],'" Tangney says.