B2B Payments

The Key To Changing Employee Travel Booking Behavior? Don’t Fight It

Between rogue employee spending and fraud, money is flying out of small businesses’ windows. It’s difficult to assess just how much is lost to professionals spending company money without approval because, by its very nature, it’s unmanaged and untracked.

Statistic Brain reported employees steal an estimated $50 billion from their employees every year, with a survey last year revealing 75 percent of workers admitted to having stolen from their employers. That’s not including the unmanaged spend that employees make on behalf of their companies for legitimate purposes, either.

It’s a problem that plagues all areas of the enterprise, including procurement and accounts payable. One of the largest, though, is corporate travel, which amounted to $1.15 trillion in spend among businesses across the world in 2016, according to the Global Business Travel Association Foundation.

According to Complai, a company that offers its Shep small business travel booking and spend management solution, 70 percent of businesses’ travel spend is unmanaged.

In a statement released last week announcing $1.4 million in seed funding, Complai CEO Daniel Senyard said the statistic means “employees are booking business travel on consumer sites without the supervision of corporate travel agents.”

One reason it’s so difficult to track business travel spend, especially among small businesses, is the prevalence of consumer booking and payment habits in the corporate setting. A traveling employee is going to book a business trip the same way they book a vacation, and it can typically lead to hurdles for managers trying to get staff to adhere to travel policy rules and to use a standalone corporate booking portal.

“If you’re a smaller company, it’s quite a big ask for your team to adopt a clunky booking tool,” Senyard recently told PYMNTS. “I kept bumping into companies that implemented the ‘Big C’ — Concur — and, after a few months, the team just said, ‘No, we refuse.’”

As any manager knows, behavior change is one of the most difficult challenges to overcome. It plays a significant role in why companies in the U.S. continue to use paper checks to pay suppliers, why professionals continue to rely on spreadsheets and why traveling employees will stick to their consumer habits when booking and paying for company trips.

Considering the volume (and value) of unmanaged spend, however, there’s no question companies have to find some way to gain greater visibility and control in this spend category.

“Everyone — from the CEO, COO, CFO and HR — they all love policies and rules and expense tracking,” said Senyard. “They love any tool that can facilitate that. But when you get to the traveler, they just want to book the way they want to book. It’s convenient and familiar to them.”

Travel and expense (T&E) solutions today, the executive continued, are focused on “building a better mousetrap,” but even tools that can be personalized won’t necessarily lead to adoption rates high enough to capture every transaction.

“You put these tools in place, but no matter how usable they are, or innovative, or how much personalization, a corporate tool just often isn’t the top choice for the traveler who wants the consumer experience,” said Senyard. “We feel that the best user experience is the most minimal user interface. You can forget we’re there.”

Complai’s Shep tool uses a Chrome extension to make it easier for employees to identify the hotel and flight rates they’re allowed to book based on company policy. The tool places a green box around the fares an employee can choose on consumer travel booking portals, and when they click a fare in that green box, information on booked travel is sent to managers.

Senyard noted this strategy places the company’s travel and spend policy rules front and center.

“What [small businesses] have today is often a piece of paper, a travel policy in an employee handbook stored in Dropbox that no one ever looks at,” he said. “They look at whatever site they want, they use their own cards, and then reimburse when employees remember to submit an expense report. We’re trying to put travel policy information at the point you need it — during the purchasing decision.”

Managers are often forced to remind employees about travel policy after purchases have already been made, the CEO continued. A worker may book a trip out of policy, make the trip a month later and then file an expense report a month after the trip itself.

“By that time, it’s too late,” said Senyard, adding that there has to be a balance between supporting professionals’ desire to make business travel plans the way they do in their consumer lives, enforcing company policy and boosting spend visibility for managers.

By working with employee booking behavior — not against it — the executive said Complai was able to convince investors that addressing small business (SMB) travel and expense management was possible.

When speaking with industry experts, said Senyard, “they basically didn’t believe that small business travel can be done — travel management for small businesses isn’t doable because they’re too small to be willing to pay, and they’re not going to change their behavior.”

With new seed funding provided by Moonshots Capital and the Capital Factory, Complai said it is preparing to bring Shep to market. Currently, the solution is testing an integration with Slack to alert managers of employee travel booking activity. Moving forward, Senyard said the firm will also look toward integrations with existing small business expense management tools like Expensify.

As far as business model goes, Complai is able to take in revenue from the booking sites themselves, meaning it doesn’t have to rely on Software as a Service revenue from SMB customers with limited budgets.

Considering the size and saturation of the SMB T&E space, Senyard said he acknowledges that tackling the pain points of this segment has to be done in a strategic, unique way.

“Our long-term vision is a ‘policy of one,’” he said, noting the term the company has coined internally. “It’s not just a piece of paper that says you can spend $300 on a domestic flight. It’s taking into account the route you’re taking, who you are, who you’re visiting, your past behavior, the market available, whether prices will go up or drop.”

This, he added, is where technologies like machine learning can come into play.

“It’s not just tapping into spending, but optimizing [return on investment (ROI)],” said Senyard, “and looking at travel policy from a different perspective.”

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