Saturday, December 12, 2009

Employee Travel Cost

I had a friend of mine ask me the other day what I expected and had received along the lines of travel expenses compensation in the past.  I explained that it had varied through the years, but there were some key elements to think about when planning to have employees travel and stay over night.  I mentioned that it was nice to have a constant look/feel from an accommodation to help people get over the fact they are having to travel for work and be away from their own beds and families.  With a hotel chain in the $100/night range, you will get a familiar and comfortable look and feel, plus almost always get free Internet and a free breakfast.  That is Per Diem money that you would not have to pay for breakfast and Internet access to the traveling employee.  When you have two people sharing a room, the cost really isn't that great in relation to the overall price you are getting for the job.  This is especially true when thought about in advance when pricing non-local work (thinking about geographical location and time of year).

You will begin to see employees request that they have Internet access when away from home even if they do not have any work related things to do via the Internet.  Quality, educated employees will require Internet access and nicer accommodations.

Also, with the chain hotel, you will have reward clubs that you or the boss or whoever can take advantage of and save money.  Collect points and start using them towards free nights in the future.  That can improve profit margins on jobs that require multiple night stays or situations where employees are doing multiple locations and staying away for multiple nights traveling.  It requires a little pre-planning, but making reservations and planning the trip route can save company money when able to cash in hotel points for work stays.  The same scenario can be said for credit cards that earn points or frequent flyer miles, etc.

Per Diem is always another factor to consider when employees are traveling.  My friend and I discussed that Per Diem perception amounts had not changed in the 15-20 years that we had been in the land surveying/engineering industries.  To help shed some light on the situation, I did a little research and have a link to the U.S. General Services Administration's (GSA) recommendation for Per Diem amounts based on geographical location broken down by state.  Here is the link to the gsa.gov Web site where the state by state informatin can be obtained.  Also, the IRS uses the GSA's recommendation when considering Per Diem allowances.

This is a little food for thought.  An employee does not want to be away from their own beds and families, but they will go forth and do the work asked of them if they feel the employer actually empathizes with their situation and provides the best accomodation/compensation for them.

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