The 4 archetypes of travel policies
Travel policies can take a life of their own. Trying to balance the interests of managers, travellers, and the finance team is complicated enough. Add to that all the travel variables to consider (class of service, rail vs. flight, hotel city cap rates, expensing protocols, level of sustainable travel — just to name a few) and the whole thing can get overwhelming. When you strip out the noise, most modern travel policies actually fall into four archetypes. Determining which archetype most resonates with your organisation is the first and most important step in defining and creating a travel policy.
The archetypes each represent a different overarching objective. They are not exhaustive and need to be tailored to each organisation's unique culture and circumstances, but can be used as a starting point to define the future of travel within your company, especially in a post-Covid world.
The first thing to do is to define your objectives. Don’t think of it as a constraint to minimise a cost line, but as an enabler to deliver on an overarching objective: drive top-line growth, increase employee satisfaction, ensure traveller safety, or perhaps something else.
ARCHETYPE 1: The “Travel as a perk” policy
Who you are
Your employees travel a lot and you’re typically not concerned about travel expenses (maybe you’re a consulting firm that bills expenses onwards to your clients). Your main objective is to keep your travellers happy with limited guidelines and comfortable travel experiences. You want to minimise the hassle of travel management and believe in traveller autonomy.
Considerations
Setup
- Empower your travellers to pick their own travel, or have it booked centrally by a travel organiser (depending on whether they value no hassle or more choice)
Booking rules
- Allow first class for trains and business/premium class on flights, depending on travel length
- Eliminate advance booking requirements
Workflows
- Limit approvals to out-of-policy exceptions only
ARCHETYPE 2: The ROI policy
Who you are
You want to empower your employees to deliver value at a reasonable cost. You’re not afraid to spend more on travel, as long as it drives more value for the company. This is the typical situation for a growing start-up or SME, with a strong empowerment culture.
Considerations
Setup
- Empower employees to book for themselves
Booking rules
- Create a moderate corporate travel policy that ensures comfort and productivity (e.g., preference for direct, economy class flights with a potential premium economy upgrade for 6+ hours-long flights)
- Require folks to book in advance (e.g., 7+ days), but not too much such that you would need to validate bookings driven by sudden client meetings
Workflows
- Introduce validation processes only for exceptions (e.g., out of policy trips)
- Make sure employees enter project codes for each trip, so you can track spend motives and adjust your policy accordingly
ARCHETYPE 3: The cost-cutter policy
Who you are
Your company is trying to optimise its bottom line and limit costs. Most important is control over travel spend; travel typically is not critical for top-line growth. This is typical of mature companies undergoing deep budget cuts or aggressively trying to optimise margins.
Considerations
Setup
- Deploy a decentralised booking through a tool with built-in validation workflows
Booking rules
- Implement a strict travel policy that enforces the cheapest available options and reduces miles chasing (e.g., no premium or business flights allowed, preference for low-cost flights)
Workflows
- Introduce a systematic approval workflow for each trip as a means to avoid unnecessary travel
- Track performance metrics (e.g. advance booking days) and cascade monitoring to managers/P&L owners to ensure compliance and increase ownership over travel spend
ARCHETYPE 4. The green policy
Who you are
Let’s face it, travel is not friendly to the environment: two roundtrips to San Francisco equates to one’s entire annual recommended carbon output; three trips to Dubai produces more carbon than driving a car for the whole year. You believe that we cannot stop meeting people and visiting clients and colleagues, but we can definitely decide to do so more responsibly. To that effect, your company is seriously thinking of implementing a concrete, “non-green-washing”, eco-friendly travel policy and initiative. You believe there is an opportunity to create a true firm-wide culture of sustainability in travel and, implemented in the right way, it should also drive savings.
Considerations
Setup
- Allow decentralised bookings, with each traveller responsible for optimising their own carbon footprint; this is a natural choice as values are best lived when they are chosen, not forced
Booking rules
- Preference low-carbon modes of transport (e.g., rail over air, direct flights over indirect routes)
- Encourage travellers to always take the train for trips less than three hours. The best way to do so is to use a booking tool that already takes into account a trip’s carbon footprint directly as part of your travel policy parameters
Workflows
- Introduce a measure of carbon in your approval workflow (e.g., all carbon-expensive flights require manager approval)
- Make use of our free Carbon Footprint Calculator tool to have an overview of your total CO2 emissions
If this archetype speaks to you, have a read of our article on sustainable travel.
Conclusion
Of course, choosing one archetype for your organisation does not limit your ability to pick and choose elements from the other three. However, there is an inherent tension in the way each one manages the setup, booking rules, and workflows. Knowing what you stand for will help you manage that tension and craft a travel policy that’s right for your company.
If want to know more on how to take the next step and define and creating your policy have a look at our articles on the 8 best practices for defining a Covid-19 travel policy and 7 steps to create an effective travel policy. Finally, to help you build a solid base for the optimal travel policy, we've also prepared a Travel Policy Template. Feel free to check it out.
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