The cost of travelling by car, plane and train continues to rise year after year and keeping a lid on travel spend is no mean feat. Harder still for smaller firms who rely on staff to organise their own travel.
So, how can you ensure staff look to save money where possible when the company is paying and clamp down on those urges to splash the cash?
Boosting their salary
Psychologist Nigel Nicholson says that employees taking a lax attitude to the way they spend on things like travel expenses can be a symptom of a deeper problem within the company.
He explains: “It comes down to whether the culture of the company is seen as being transactional; the company is buying my time as an employee and getting what they can out me. If I feel that I’m not being paid enough, then it is quite understandable to view expenses as a tax-free way of increasing my wages.”
This attitude can be corrosive to the company as a whole, but breaking this perception is a question of culture suggests Nicholson. That means providing employees with a work environment where they feel included and respected.
This is an approach employed by Alessandra Sollberger, founder and CEO of Evermore Health. She says that in her experience the best way to not only keep spending by staff under control, but to get them to engage with making more frugal spending decisions, has been to make them feel more involved.
She says: “We give the team full visibility into budgeting and what different expense levels, at a monthly pro rata, mean for the business. That way the team feels empowered. Sitting at the table on an important topic like this means they think twice about their spending.”
Outsourcing may help
Most employees generally want to do the right thing when it comes to managing their expenses, but what they view as the right thing can vary wildly based on their own values.
That’s according to Julie Oliver, managing director of travel management firm Business Travel Direct, who argues that staff need to have an easy to understand policy which outlines precisely what is acceptable and what isn’t.
Oliver adds that it can be useful to outsource certain expensing functions.
She continues: “For example, a company can outsource management of business travel and then it is that external company that will query why a traveler has gone for a more expensive option. The company can also capture the information and help the business to understand why certain decisions are made.”
If guidelines don’t do the trick, setting specific spending limits on a monthly basis will give back control to the business while still giving employees a degree of financial freedom.
That’s an approach employed by Lisa Forde, director of event stationery company Dotty About Paper.
She sets limits on how much can be spent and claimed back each month, which she says has been effective in ensuring employees only spend what they need to, reducing the overall spend and increasing the legitimacy of each claim.
- Manage staff expenses in the palm of your hand with a FairFX Prepaid Corporate Mastercard®. Expenses can be capped and topped up through an app in real-time with approvals built in.
- Staff are less likely to see expenses as something they can abuse if they feel valued and empowered.
- Transparency is a good thing – it can help staff understand how their spending affects the business as a whole.
- Setting a firm travel policy with clear guidelines ensures that everyone knows what they can and cannot claim for, ensuring costs are kept to a minimum.
Find out how the FairFX Corporate Card and Expense Platform can help you take better control of staff expenses and help you to send and receive money abroad with ease.