The corporate industry underwent changes after the effects of the global pandemic. Businesses needed to manage their resources even more carefully and find ways to cut costs. Movements were limited, and business travel was no exception. Many companies either stopped business travel altogether or limited it to only essential trips.
However, now that things have started to go back to normal, business travel is picking up steadily. Industries have seen the importance of corporate travel in business relations and deals, helping establish a personal connection and build trust. Business travel just never goes out of style! But with business travel comes business risk.
It's crucial for companies to have a good system in place to manage business travel. This includes having a clear policy, setting a travel budget, and knowing how to handle risks. Procurement managers should also be involved in getting the best deals for business travel and supporting the finance department.
When business travel resumes, corporate travel management (CTM) — also called corporate travel risk management (CTRM) — comes in to manage business travel risks through real-time data and analytics. This is the process of identifying, assessing, and mitigating risks associated with business travel. Under CTM, business travellers are also given support with the help of real-time data and analytics.
Business travel can get complex, but an efficient and effective corporate travel management system can help make business travel seamless, safe, and cost-effective. Ultimately, it keeps employees safe and business goals on track.
Chapter 1: Components of Travel Risk Management
The Four Key Components of Travel Risk Management
Corporate travel is a necessary business expense. It's a "necessary evil" that many business owners and employees begrudgingly accept, but they understand that it’s a part of the business. It requires time, effort, and money. While business travel has its perks, it also comes with risks.
Virtual meetings worked for a while, but there's no denying the importance of business travel and face-to-face business relations. In-person business travel will continue to play a significant role in business — though with new guidelines and procedures. Now, corporations can mitigate the risks with a proper CTRM program, which has four main components: preparation, planning, execution, and adaptation. How can companies complete these?
1. Identify the Risk
Preparation is the first — and arguably the most important — step in business travel risk management. Once the corporation recognises the need for CTRM, the next step is to answer important questions, including:
- Who will run the program?
- What risk exposure does the company face?
- What is the necessary insurance and assistance coverage?
- How will the company implement the program?
The first stage mainly identifies the risks and sets up the travel risk management program. It's vital to have a clear understanding of business travel risks before crafting a plan to mitigate them. Upon completing the preparation stage, companies should then work to develop a policy that covers all aspects of business travel.
The policy should cover everything from pre-trip planning to post-trip follow-up. It should consider the current business travel landscape and the risks associated with business travel. The policy urges business travellers to be aware of the company's travel risk management policy and what is expected of them.
2. Prepare the Traveller
After establishing a business travel policy, businesses should put together a solid plan. The plan shall follow the framework set by the business travel policy. This process will allow the policy to be more actionable and practical, regardless of the region or business travel destination. Planning shall also assess all area-specific risks and prepare the travellers for them.
The personnel involved in business travel should understand their obligations under the business travel policy. They should be able to identify potential risks and take the necessary steps to mitigate them. Furthermore, they should know how to take action in case of an emergency. This is possible through training, which shall also happen during the planning stage. The goal is to translate the overarching business travel policy into actionable items that business travellers can use when they are on the road.
3. Track the Traveller
With solid policy and planning in place, businesses can now entirely focus on business travel execution. This stage is where business travellers go through with their business travel itinerary. It's important to note that business travel risks can change anytime, and business travellers should always be aware of the latest risk information.
The execution of business travel should be done in accordance with the business travel policy. The question for this phase is: how prepared is the organisation for business travel risks and recovery? Tracking the travellers, maintaining communication, and having a plan B are some of the things businesses should focus on.
Be Ready To Respond in Case of Emergency
The policy should allow businesses to adapt quickly to changes in business travel risks. While the travellers are on the road, the business should have a way to monitor the situation and be ready to respond in case of an emergency.
The business should have a clear understanding of the traveller's location and should be able to communicate with them in case of an emergency. The company should also have a plan for business travel disruptions, such as cancelled flights or natural disasters. Lastly, the business should have insurance to protect the travellers and the business in case of an emergency.
The business travel landscape is constantly changing, and businesses should adapt their CTRM program to the current situation. Adaptation means recognising what needs to be improved and making the necessary changes to the business travel policy. It includes feedback from business travellers, so their needs and concerns are considered.
In conclusion, the components of travel risk management urge businesses to identify the risks, prepare and track travellers, and have everyone involved ready to respond to any business travel emergency. Companies are up for a more successful and incident-free business travel experience through preparation, planning, execution, and adaptation.
Chapter 2: Travel Risk Assessment
How To Approach a Travel Risk Assessment
While on the road, business travellers need to be aware of the risks associated with business travel. At the same time, corporations should take measures to reduce these risks. With a CTRM in place, it's possible to accomplish both. As a part of the four main components of a CTRM, conducting a travel risk assessment is integral to business success.
Risk assessments identify any threats an employee could face during corporate travel. The results form the policies and procedures for risk mitigation, which are then forwarded to employees for their safety. A travel risk assessment takes into account the following and more.
Travel Purpose
The travel purpose will help determine the level of risk for business travellers. Most business trips are for meetings, conferences, or business development. These trips usually have low risks and don't require many safety measures. Other business purposes — such as fieldwork or research in high-risk areas — need more comprehensive risk assessments since the risks are higher.
Every travel purpose has a different set of risks, which is why it's important to tailor the assessment. It's more possible to adjust policies and control risks when the business purpose is clear, as opposed to a generic evaluation for all business travel.
Travel Destinations
There are different types of business travel destinations: high-risk, medium-risk, and low-risk. The risks associated with each destination will be different. For example, an international business trip will require more safety measures than a domestic trip. Employees will have to immerse themselves in new cultures and languages and be aware of the political climate, which can sometimes be unstable. The same applies to repeat and last-minute business travel.
The level of risk for business travel destinations can change over time, so businesses must stay up-to-date on the latest information. The best way to do this is by subscribing to travel advisories from the government or other reliable sources.
Traveller's Health
Is the employee healthy enough to travel? Do they have any pre-existing medical conditions that may be exacerbated by business travel? What are the traveller's immunisation records? All these factors should be considered before approving business travel.
Considering the health of business travellers is important for two reasons: ethics and liability. The company is responsible for ensuring that its employees are healthy and won't be putting themselves in danger by travelling. Moreover, the company may be liable if an employee falls ill while on a business trip.
To get a better understanding of the business traveller’s health, corporations should consider conducting pre-travel health assessments. These assessments are conducted by a healthcare professional and can help identify any risks associated with business travel.
Traveller's Gender and Age
Are business travellers more likely to be male or female? What are the unique risks associated with each gender? For example, sexual harassment and assault is a business travel risk that is more likely to be faced by female business travellers. Age can also be a factor in business travel risks. Business travellers who are 65 years or older are at a higher risk of going through health complications while on business trips.
Travel Itinerary
Is the business traveller's itinerary too hectic? Do they have enough time to rest and recuperate between business meetings? An overly packed itinerary leaves business travellers exhausted and more vulnerable to business travel risks.
It's important to have a clear understanding of the business traveller's itinerary before approving business travel. This way, companies can ensure they have enough time to accomplish everything they need while on their trip. On top of that, business travellers should have some downtime to avoid burnout.
Mode of Transportation and Route
How will the traveller get to their destination? Will they be flying, driving, or taking a train? Each mode of transportation has different business travel risks associated with it. For example, flying is generally considered the safest business travel form. However, there are still risks associated with flying, such as turbulence and lost luggage.
Companies must consider the traveller's mode of transportation when conducting a risk assessment. They should know if the travel route is direct or indirect. Indirect routes are riskier as they increase the chance of business travellers getting lost. They also make business travellers more vulnerable to other business travel risks, such as crime. Companies should ensure that the business traveller takes the safest route and transportation to their destination.
Climate and Natural Disasters
Are there any extreme weather conditions or difficult terrain along the route? Such conditions can make business travel more dangerous. It's also vital to know if there's a risk of natural disasters, such as earthquakes or floods, in the destination. Getting travel insurance or ensuring that the traveller is properly trained for the conditions is essential for business travel risk management. These factors are beyond anyone's control, so it's best to be prepared.
Destination's Political Stability
Political instability can lead to civil unrest and travellers getting caught in the middle of it. Companies must stay updated on the destination's political situation. If the destination is unstable, it's best to either postpone business travel or choose another destination.
Destination's Health and Health Care System
What is the state of the destination's health and health care system? This is important to know in case employees fall ill or get injured while on business trips. A destination with a flawed health care system can make it difficult to get proper medical treatment.
Companies should research the destination's health and health care system before approving business travel. They should also have a plan in place if travellers need medical attention while on their trip.
Based on these factors, the travel risk assessment will generate a report that includes recommendations for both the employee and the corporation. Consider all types of risks, no matter how small, to create a comprehensive business travel risk management strategy. Once the risks have been identified, the company must put together a plan to alleviate them and guarantee the safety of their employees.
Chapter 3: Travel Risk Management, Then and Now
Just like any system, CTRM also went through various revisions. Industries went from lax to more safety-conscious, and strategies needed to adapt. Technology also played a significant role in how business travel risk management has changed over the years. The industry started with paper records, moved to spreadsheets, and now uses business travel risk management software.
When COVID-19 hit, business travel came to a screeching halt. When borders reopened, strategies had to be re-evaluated and updated once more. Tracking business travellers became more essential than ever to keep them safe and limit the spread of the virus. Now, business travel risk management has to consider both the traditional risks and the new risks brought about by the pandemic.
The pandemic forced business travel risk management to evolve yet again to meet the new challenges posed by the pandemic. It's an endless cycle, but that's the nature of business travel risk management. Let's explore how business travel risk management has changed over the years.
Add a Level of Approval
The first step in business travel risk management is to screen travel requests. There should be a level of approval for business travel, and the employee must meet specific criteria. For example, the company may require employees to have a certain amount of business travel experience.
The traveller's company may also require them to have a valid passport and business visa, if applicable. They should also be up to date on all their vaccinations. The company may also have a policy that business travel must be essential for the business trip to take place.
These are just some of the criteria that travellers must meet before their business travel request is approved. The company may have other criteria that business travellers must meet.
Updated Restrict Destination List
The company may have a list of destinations that are restricted. The traveller's company may restrict business travel to specific destinations due to the security risks involved. For example, employees may not be allowed to travel to countries at war.
The company may also restrict business travel to destinations with high crime rates. They may also limit trips to countries that have natural disasters. Destinations that have an outbreak of contagious disease must be restricted as well.
Companies should update their list of restricted destinations as the security situation changes. They may allow business travel to a previously war-torn country if the security situation has improved. The company is free to update their list of restricted destinations if there are new business opportunities. As long as the company and travellers know the risks involved, they can make an informed decision about whether to travel to a particular location.
Track Employee Journey
The company must track the traveller's journey. Companies must know where the employee is at all times and be able to contact them in case of an emergency. They can track the journey using GPS tracking devices or business travel risk management software.
The company must also have a plan in place in case the traveller goes missing. They should have a list of emergency contacts and know how to reach them. All these are possible with communication and practical business travel risk management software.
Healthcare Insurance
Another critical aspect of business travel risk management is to have healthcare insurance. The company must have healthcare insurance that covers business travel. This is important in case the traveller gets sick or injured while on business travel.
The business must also have evacuation insurance. Suppose employees need to be evacuated from a country due to an emergency. In that case, the insurance shall cover the expenses and ensure the traveller's safety.
The company may also have other types of business travel insurance, such as trip cancellation insurance. Insurances help mitigate the risks involved in business travel and protect the traveller's company from financial loss.
The business travel industry has changed a lot through the years. It's now more globalised, with business travellers going to more destinations than ever before. With COVID-19, companies transformed their business travel with a people-centric focus. It includes physical, mental, and emotional health. It's not just for business travellers; it's for everyone involved in business travel, from the CTRM team to the business traveller's family.
Policies cover more than just medical risks. Business travellers are given more responsibility to stay informed and make decisions that will keep them safe. Companies need to be more specific about the risks involved in business travel, and they need to tailor their strategies to each traveller, considering the traveller's role, destination, and company policy.
The Bottom Line
The pandemic has changed business travel forever. It has urged companies to change the way they view and manage business travel risks. With a people-centric approach, businesses can keep their employees safe while still achieving their business objectives. With more flexible policies, they can allow their employees to live and work in the way that works best for them.
It's a demanding and ever-changing landscape, but business travel risk management doesn't have to be dispiriting. With the right tools and strategies, your company can stay ahead of the curve and keep your travellers safe. Technology has advanced to a point where business travel risk management is more effective and accessible to implement than ever before.
Your business travellers are your most valuable assets. With the right business travel risk management strategy, you can keep them safe without sacrificing business objectives. Focusing on the components and having the right approach will help you create a comprehensive business travel risk management strategy that works for your company.
When it comes to business travel risk management, there's no one-size-fits-all solution. The business travel industry is constantly changing, and business travel risk management has to change with it. What worked yesterday might not work today. That's why it's integral to regularly review business travel risk management policies and procedures. Aim for a business travel risk management strategy that's agile, people-centric, and comprehensive. With the right approach, you can keep your business travellers safe and sound.
