In 2013, a North American division of T-Systems International made a brave decision. The company, a subsidiary of Deutsche Telekom, rewrote its travel policy. All workers, no matter their seniority, were told to fly in economy class. The C-suite previously enjoyed the luxuries of business class, or better, on long haul. To say they were unhappy would be an understatement. However, the change allowed the company to shave $1.5 million off the annual budget. It was all for one, and one for all.
The company was not alone; in the post recession era scores of corporations across the world took drastic measures to save money. But the million-dollar question (sometimes quite literally) is whether a blanket travel policy provides best value. Two tier policies, which allow executives and senior members of staff to fly in premium cabins and stay in five star hotels, have their advantages. But do they outweigh the we’re all in this together approach?
During a recent conversation, a divisional head of a large financial institution said: “If you think everyone is equal in this company, go and look in the car park.”
It’s true to say that a hierarchy exists in the vast majority of business organisations. That may equate to higher salaries, benefits, bonuses, having a personal assistant and so on. For some, the travel policy should be no different. The challenge, however, is where to draw the line. Senior executives would, naturally, fall into the top tier, while junior staff would sit on the bottom rung. It is, therefore, dividing the large middle ground that must be treated with care. Getting the balance wrong could have a negative impact on productivity, staff motivation and retention levels.
The two-tier approach is seen, perhaps rightly, as a slightly old-fashioned approach to travel management. It harps back to the days when staying in the Four Seasons and flying in Club World were non-negotiable perks for business leaders. Nowadays some companies demonstrate far more progressive practices. Properties are more likely to be selected for their convenience, as opposed to their brand appeal. One might question whether splashing out on a room at the Four Seasons is business critical. Probably not. Forward-looking organisations are most interested in productivity, and the value of time. The question must be asked: What benefit does an organisation derive from allowing a CEO to fly short-haul business class while a business development manager working on a critical project has to fly economy on a long-haul flight?
That’s not to say, though, that there is one right answer. Much depends on the size and culture of an organisation. What might be successful in one sector may not cut the mustard in another. Let’s say there are 100 travellers and a policy dictates they must all stay in a four star hotel. That might keep the majority happy. It may engender positive team solidarity. However, say 96 of those travellers stayed in a three star property, while the four most senior people stayed in a five star property. It might save the company money while at the same time create a culture of aspiration among the 96 that want break into the top four.
Travel procurement departments and travel managers can’t bury their heads in the sand on this issue. It’s not just about cost. The reputation of the company, its overall productivity, and moral of the employees could both be on the line if the balance is wrong.