By Dan Godsell, global sales, North America
In today’s fast-paced, ultra-competitive global economy, change is a necessary constant to remain competitive. Strategic shifts in specific functions, including business travel programs, can send ripple effects across an organization. Implementing a large corporate travel program is no small task, but there are strategies that will help ease change management, particularly in this age of digital transformation.
This is the second in a series of articles on travel procurement in a rapidly changing economy. In the first, I wrote about procurement practices struggling to keep pace with a fast-changing world. Here, I want to focus on the topic of strategic alignment with corporate priorities by offering a big picture view, a real-world example, and some specific steps you can take to align your travel program with your organization’s goals.
The value of this alignment process can be clearly seen if we consider the effects of misalignment. Goals missed typically have ramifications such as reduced revenue and/or share price. It’s easy to understand these effects when measuring items such as R&D investment gone awry. Less tangible, or indirect categories, also impact revenue, employee retention, customer satisfaction, and much more if they’re not aligned to organizational goals. Travel programs can fall into this category.
Travel and procurement teams can build their credibility and influence by purposefully linking their travel programs to the big picture. Let’s look at a scenario that demonstrates how this alignment effort helps the travel manager, the organization as a whole, and travelers.
Often in executive strategy meetings some priority is placed on employee recruitment and retention. We’ve been hearing about the war for talent for many years, and the pressure to find and keep the best people has never been higher. For context, in August 2019 the US unemployment rate was at 3.7 percent, according to the federal Bureau of Labor Statistics. That’s historically low — even lower than what some economists consider full employment. Yet, according to the St. Louis Federal Reserve Bank, the professional unemployment rate is 2.9 percent as of July 2019. In Canada, the unemployment rate was at a nearly 20-year low of approximately 5.8 percent in 2018. That means that within the framework of an overall tight labor market, there are segments of specialized capability where the war for talent is very real.
The consequences of that competition for the best and brightest are quite tangible. We reported that research showed replacing an employee who is paid an annual salary of $100,000 can cost $213,000 — 213 percent of the salary. Building on that one data point, a large enterprise can save a significant amount of money with relatively small reductions in turnover.
If one of your organization’s goals is to find and retain the best talent, your travel program can become a part of this strategy.
I recently consulted with a client, a financial firm that’s been growing rapidly, at the same time they were completing their yearly planning. One of the key drivers behind several of their strategic goals was the changing demographics of their employees. Millennials now make up a majority of their workforce, and they knew this generational change would continue, along with the evolving expectations of this workforce cohort.
At the same time, the travel and procurement team was reshaping the travel program. The organizational goal of “find and retain the best talent” was translated into “provide a next generation traveler experience” in order to fit the context of the travel program. It was used as part of their TMC evaluation criteria, and, just as importantly, as part of their communications and change management process.
When leadership asked why they were changing the travel program, the team was able to provide them with the same strategic reasoning as the leadership team. Suffice it to say, there was buy-in from the top-down.
Happy travelers are happy employees. Happy employees provide good customer service.
Recruitment and retention are just two examples that demonstrate the value of aligning with corporate goals. Some companies might work toward being a more data-driven organization. How do you collect, analyze, and take action on your travel program data? Perhaps one of your initiatives is to simplify (one of our guiding principles at Expedia). Cost reduction and control, digital transformation, safety above all else are also examples of guiding principles, and there are many more. You’ll discover how this can apply to numerous corporate strategies, visions, imperatives, and goals.
As business travel strategy discussions take place in your organization, look for opportunities to align your travel program. That might mean picking one or two corporate strategic goals and spending time understanding how travel impacts those goals. In evaluating travel management companies (TMCs), ask them how their services and tools support those goals. Work with your procurement team to build those criteria into your provider evaluations.
Of course, with strategy updates happening regularly, you also need to be prepared to do this again in future planning cycles. The alignment process then evolves into a continuous improvement method — a topic for another article.
One thing is for sure. Regardless of what your business travel program goals are, if you can use reasoning and messaging that resonates throughout your organization, you’ll have better results.
 “Civilian unemployment rate,” Bureau of Labor Statistics, updated August 2019, https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm#.
 “Unemployment Rate: Professional and Related Occupations,” Federal Reserve Bank of St. Louis, updated August 2019, https://fred.stlouisfed.org/series/LNU04032217.
 “Rate of unemployment in Canada from 2000 to 2018,” Statistica, April 29, 2019, https://www.statista.com/statistics/578362/unemployment-rate-canada/.