Travel management is probably one of your firm’s largest controllable expenses. And, its impact on work/life balance affects employee morale. So, what are you doing about it?
In this economy, every firm is looking for an edge. Are there internal efficiencies your firm is missing? Can travel management be a way to cut costs, boost employee morale and increase retention? In an effort to answer these and other questions, Consulting magazine put the topic of travel on the table and brought together travel managers and industry executives to discuss travel, and how it impacts a firm, in more detail.
• Judy Bauer, Global Travel Director, Marsh & McLennan Companies
• Gary Beu, Managing Director, People and Leadership Development West Monroe Partners
• Linda Bice, Travel Director, Bain & Company
• David Kaufman, Managing Partner, Acquis Consulting
• Taylor Milner, Principal, Stroud Consulting
• Joe Novia, Vice President, Marriott ExecuStay
• Douglas Weeks, Director, Global Sourcing, Booz & Company
Consulting: So, we’ve got large firms and smaller firms represented here. Just to level-set, can each of you tell us how travel is handled at your firm? And what are the major travel management issues you’re going to be dealing with in 2011?
Douglas Weeks: We manage travel centrally at Booz & Company. We have roughly 3,500 employees around the world and have a global travel policy and regional policies that account for geographical differences. As far as 2011, I think there’s going to be continued cost pressure from both an internal and client perspective. I think our biggest challenge will be keeping costs down while costs for hotels and airfares are increasing. It’s kind of a two-fold challenge because of increased demand. We’re right in the midst of our RFP season, but controlling costs contractually is just one part. Controlling it behaviorally and culturally in another.
Judy Bauer: I think I face some of the same challenges that Doug is facing right now. We’re about to hit an upturn, and costs are always an issue. The costs will go up, that’s inevitable. But we’re able to cut costs other ways. When I joined MMC three years ago, it was a non-consolidated travel environment with 55,000 employees all doing their own thing. There were in excess of 43 travel management companies in play. Today, there’s only one. So I’m in the process with my team of deploying that throughout the world. We’ve completely consolidated U.S., U.K. and Canada and my 2011 initiative is to deploy the program in Latin America and Asia. My challenge to is to continually drive the value proposition of travel management because I firmly believe mandate isn’t always the answer to everything. I want my travelers to believe in the program and comply to it because they value of it, not because they have to. In addition, we also emphasize the safety, security and well being of our travelers—we need to know where you are at any given time in case of an emergency—as much as we do price.
Gary Beu: I’m on the absolute opposite end of the spectrum of what we’ve just heard. At West Monroe, we have a completely de-centralized approach to travel. We have some expense policies that set parameters, but the expectation is that each individual is responsible for their own travel arrangements. We haven’t yet tried to manage that process. Whether that will change as we continue to grow remains to be seen. Right now, we’re at 250 people, and we do not look at this as an area of any particular concern either in terms of the morale of our own people or from a client perspective. We haven’t heard anything about the costs that we’re passing through to clients, so we remain focused on making sure our people continue to travel to maintain the necessary relationships they have with clients. Even in 2009, when it would have been tempting to encourage people to limit their travel, we didn’t. If anything, we encouraged our people to stay out in the market in front of their clients.
Linda Bice: At Bain, we have about 5,000 employees, and we are consolidated in North America. At some point it would be nice to get some global deals, and we’re starting to move in that direction. As far as travel management, we have on-sites and travel counselors, which has tremendously helped our consultants with work/life balance. We have an online booking tool we encourage our consultants to use for simple trips, shuttles and trains to help offset some of those costs for clients. I would say our compliance is 98 percent. They book everything through us either by phone or online. I think that takes some pressure off them.
Taylor Milner: At Stroud, we’ve taken a principled-base approach. Imagine it’s your money, imagine your client is sitting next to you, and then make your travel decisions based on that. The things we’re trying to do to improve travel for our 75 people are more on the back end with expense reporting and making that process as easy as we can make it. The front end is pretty open for people to do what they want as long as they follow the principles. We have to coach them a bit when the first join the firm, but 99 percent of the time people make the right decisions. Therefore, they get a little bit more leeway in what they want and how they book it—they can book any airline, or any hotel—as long as it’s also in the best interest of the client.
Weeks: Sort of the sunshine rule, right? If it can pass the test of the client, then it’s probably alright.
Milner: Absolutely. We always say if you wouldn’t mind your expenses printed on the front page of the Wall Street Journal then you are in good shape.
Bice: From a travel management perspective, I think it’s part of our job to pick hotels and airlines that our consultants want. We have to be cost conscious, but consultants have to like it, too.
David Kaufman: We have about 45 consultants and we’re probably pretty unique for a firm of our size because we have a
Corporate Travel Advisory practice that’s focused on larger firms so our employees are very aware of what other companies are doing, and have a higher threshold and expectations for what we do. We’ve had an expense reimbursement system for the last ten years, even going back to when we were just six people. We have an end-to-end
corporate travel policy even though our employees only travel about 20 to 25
percent of their time.
Consulting: That seems manageable. Does anyone suspect that we’re hitting a burnout point, and travel is a part of it?
Milner: I do a lot of the recruiting at our firm and a lot of the questions I get are about the travel. I always tell them travel is part of it, but the job is the client work. Our consultants say ‘I love my job and the travel is just part of it.’
Beu: The same is true at West Monroe. We are trying to instill a level of ownership of one’s career development, career path and the level of engagement they are going to derive from the choices they make. We give them a fair amount of flexibility in how they book and manage their travel. That’s in line with the cultural approach of the firm; but overall, I think there’s generally an acceptance that in consulting, you travel and these days, unfortunately, travel is a hassle. Little can be done to mitigate that; it’s almost beyond our control. In general, I think the airlines are the villains here.
Bauer: A lot of it comes down to balancing the expectations of the consultant. We know it’s difficult to travel as much as they do, and we’ve taken a few perks away— for instance, business class is off the table. There are exceptions, of course, but as a general rule, any of those upgrades would have to approved by a manager on a case-by-case basis.
Bice: Another thing that makes our job more difficult is the capacity issue—there is not a lot of capacity out there. When a consultant is stuck at a meeting, it’s pretty bad when they can’t even get on another flight. That’s why we work so hard on cultivating these relationships with our vendors, so when there’s a problem I can call someone and say ‘I need your help.’
Bauer: There’s a certain monetary value to our vendor contracts for favors and wavers, and the airlines make sure they tell us at the end of the year. This is how many people were wait listed, upgraded etc. There is a value to that data to the firm.
Consulting: I’m assuming, at least for the larger firms, you have similar partnerships with hotel vendors, as well?
Bauer: There are some standard offerings in hotels that we try to negotiate pricing, like Wi-Fi or breakfast or late check out or a newspaper delivered to the room at no cost, etc. The idea, as it always is, is to make it a little more comfortable for travelers.
Bice: You certainly don’t want the hotel walking someone. That’s like the last call you want to get, and if they do that, that’s not good. Generally, you’ve got less headaches with hotels because there’s really only two things that can happen at check-in, the room isn’t ready or the room isn’t acceptable. If that happens, the hotel will switch them to another room. There are little things, like the high- speed isn’t working or something, but there’s a lot more that can go wrong with the airlines