Corporate travel and expense (T&E) was turned on its head last year, and while industry experts are finally beginning to elevate their expectations for the return of the business trip, T&E is unlikely to return to the way it looked in a pre-pandemic market.
Many of the biggest changes in employee spending habits — and the way companies control them — won’t come as much of a surprise. Rather than spending funds on flights and hotels, professionals are instead using employer cash to finance what they need in a remote work environment.
But there are some unexpected trends that businesses and their T&E solution providers have uncovered in recent months. According to TripActions Liquid General Manager Michael Sindicich, there are likely to be permanent shifts to expense management strategies that are, in some ways, the opposite of legacy patterns.
Loosening The Purse Strings
At the onset of the pandemic, many organizations were forced to press pause on spending and investment in an effort to mitigate against risk and safeguard their financial strategies through the volatility.
What happened with T&E spend, however, turned out to be quite a different approach.
“We saw companies being more lenient, and offering different types of perks to employees,” said Sindicich.
He pointed to recent TripActions Liquid research, which found that in addition to some of the more expected spend categories seen last year, like restaurants and computer software and programming services, employers altered their employee expense policies to allow for other categories. That includes products like sewing and gardening supplies.
Not only were employers keen to replace in-office perks like happy hour and free meals with new benefits for employees working from home, but as seen in a recent surge in initial public offerings (IPOs) and special-purpose acquisition company (SPAC) activity, Sindicich said many businesses are actually faring quite well.
As a result, those businesses are looking to grow and retain key talent, with expense management strategies an important component of that effort.
“Companies, at the start of the pandemic, definitely looked at their business with a lot of uncertainty and said, ‘How are we going to save money?’” Sindicich added. “But I think you also need to remain competitive and a place where, if you’re hiring, people want to work at.”
A New Type Of Traveler
Today, with an acceleration of vaccine rollouts, the corporate T&E sector increasingly expects a return of business travel volume. The conversation is often focused around when the sector will see that volume return to pre-pandemic levels.
Yet with many organizations expecting to retain a work-from-home environment (or, at least, a hybrid approach), questions remain about the ability for corporate travel spend to ever go back to “normal.”
Sindicich said TripActions is seeing 13 percent week-over-week growth in travel bookings growth, with TripActions Liquid experiencing even more dramatic growth since the corporate travel payments platform launched in February of 2020.It’s an undeniable sign of recovery in the business trip market, but Sindicich noted that doesn’t necessarily mean the industry will go back to the way it was.
While business trips have often been about employees leaving the office to facilitate in-person connections with key company partners and customers, the pandemic could usher in a new kind of business traveler as a result from continued remote working models. Professionals who work from home, and who wouldn’t normally be traveling for work, will now see their business trips centered around coming into the office, or another central location, to foster in-person connections with their own teams.
“Think of an engineer that wouldn’t travel, and is now coming to a central location to do an off-site with their team,” said Sindicich. “Where companies adopt remote working, what you’re going to see is a new category of travelers that typically haven’t traveled or submitted expense reports in the past.”
Where organizations save money on office space, they’ll reallocate those funds to support remote staff. Other potential shifts are likely in the form of more virtual cards being used to support remote staff who need to book travel or make purchases, yet are unable to receive a physical card from a team member.
It’s impossible to say what the landscape will look like in the future, but whether it’s a more lenient spending policy or a new spender profile shaped by remote workers, what’s clear is that corporate T&E may never look the same.
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