SMEs are losing millions of work hours to inefficient travel management, says Serko
Thu 14 July 2016 - 9:30 amAccounting | Business Tech | Sales | Small Business | Travel
Company travel is being inefficiently managed by Australia and New Zealand’s SMEs, according to Serko, which revealed 81 millions hours are being lost to this process each year.
The travel and expense management software company highlighted research by TNS Research, which found that 46% of Australia and New Zealand’s one million SMEs travel regularly for work. On average, these companies book 30 trips per year, and approximately six hours is spent booking and managing each trip. This equates to more than 81 million hours spent managing travel in SMEs. The two main booking methods used by SMEs are booking through a travel agent (33%) and making bookings on a travel website (66%).
The best deal doesn’t always pay off
According to Serko CEO Darrin Grafton, unlike large corporations, SMEs don’t have the numbers to negotiate better rates with airlines and hotels. Consequently, they either have to pay a premium for travel agent bookings or internalise the time and administration associated with making bookings directly on travel website.
“This process can be inefficient and time-consuming and – when you consider the hourly rate of the employees involved – it’s can be quite costly,” Grafton told Dynamic Business.
“SMEs book directly on supplier or aggregator websites with the aim being to secure the best deal possible. However, getting the best deal in an unmanaged process doesn’t always pay-off. In the SME space, 25% to 40% of business trips change at least once. If an employee books a trip to attend a business meeting, and that meeting falls through, then the employee needs to go through the process again. It can go around in circles if the meeting needs to be rescheduled more than once. Employees then need to go through the process of getting their credit card statements and reconciling that through the employer’s accounting system. On top of that are the service fees SMEs incur when using travel websites – most impose a service fee at each stage of the booking process: there’s a service fee for booking a hotel, another for booking a flight and a further one for booking a taxi. SMEs don’t keep track of the time being wasted when the process of booking and managing company travel is inefficient.”
Set boundaries, encourage efficiency
Grafton said it was concerning that some SMEs give their employees free reign to make bookings but then reprimand them for flying business class or staying at an expensive hotel.
“SMEs should instead be setting boundaries and encouraging employees to book efficiently,” he explained. “By not doing so, they’re losing money that could have been put into winning business. SMEs can use travel management software to subtly influence the behaviour of employees when it comes to booking trips. For instance, if an employee books a flight from Sydney to Melbourne through Virgin, when a cheaper flight was available at the same time through Qantas, they know their manager will receive an email highlighting the price difference. In this way, the process is visible for SMEs and there is a guilt factor, which can help change the behaviour of travellers.”
Grafton said another aspect of company travel where SMEs tend to have insufficient oversight is work health and safety.
“SMEs owe a duty of care to their workforce under WHS legislation, and this includes knowing each employee’s travel plans,” he said. “If employees are using multiple travel websites and neglect to forward relevant travel information to their boss or another relevant decision maker, the SME is taking on risk. What if an employee books a room at an unsafe hotel or books a flight with an airline that recently had a crash? SMEs need to ensure booking information is visible. If disaster has struck a city that an employee is visiting for work, you need to know you’ve done as much as you can. You need to know there has been a disaster, whether an employee is there and know how to contact them.”