6 reasons why Duty of Care in Indian business travel programs is non existent !!
by Emily Rose Refund on Cash App?
Business Travel Duty of Care is something that Indian CXO’s pay scant attention to as they drive for lower travel costs / lower fee pricing from their travel agencies & suppliers.
Despite being recognized worldwide for their talent and business acumen, it is surprising how shortsighted Indian CXO’s have been when it comes to their business travel programs.
As the premier business travel consultant in India and emerging markets, ProKonsul has evaluated multiple programs in the last 5 years. With some exceptions, there is very little CXO oversight to managed travel programs in India. Most of CXO’s regard business travel as more an act of fulfillment and purchase. Rather than one that involves strategic thinking, technology best practice & due diligence to limit corporate liability. They have also ceded total control to their gatekeepers, who have limited ability to introduce best practice.
Prioritization of fee & price minimization is the highest KRA of their travel/sourcing departments. Maximum energy is spent squeezing every last rupee that the suppliers/ TMC / Travel agency could give them in the contracting process rather than ensuring basic program hygiene. Introduction of new business models that are focussed on cost optimization, operational efficiency & best practice is extremely limited, in such a negative environment.
The overall emphasis of most Indian business travel programs is the lowest ticket cost / lowest fees. Qualitative issues like strategic sourcing, technology, account management, data & analytics and most importantly corporate duty of care, don’t count for much !! A lot of business travel in India is managed as it was 20 years back !!!
There are some exceptions, but honestly, they are still few and far between - Global MNC’s who have a globally consolidated travel program in India - Some Indian transnationals
These organizations have evolved their travel program to actively include traveller risk & duty of care.
1.Working with Travel Agencies V/s TMC’s
Most companies in India execute their corporate travel programs with “Travel Agencies “ and not “Travel Management Companies (TMC’s”).
“Travel Agencies’ - are generally non specialists in the business travel domain & generally win business largely on price/location attributes. They don’t deliver the full range of business travel support services. These travel agencies could also be ticketing consolidators or tour operators for whom corporate ticketing is a useful add-on.
2.Highest focus on lowest fees
Much of the Indian business travel purchasers appoint travel agencies / TMC’s based on the lowest transaction fee pricing or the highest levels of discount. Many of our travel managers & procurement professionals place a far higher value on fee pricing rather than the qualitative aspects of their vendors' capabilities like
- Account management
- Risk management
- Management reporting
3. Managing travel using the “IT/ ITES Industry ” model
Companies in the IT / ITES industry, who should be leaders in best practices actually have some of the most regressive travel programs. They follow a very unique business travel operating model. They put each travel request out to “bid” amongst multiple travel agencies / TMC. In this situation, the lowest bidder wins the ticket and fulfills it.
This places in question, how these clients ensure data consolidation of all tickets booked and tracking of their employee.
4. Hotel reservations disaggregated - No consolidation of data
Another very unique situation seen with Indian companies is that they don't consolidate their hotel reservations with their TMC or Self Booking Tool (SBT) if implemented.
Bookings for hotels especially international hotels are done in multiple forms
- through rate consolidators
- directly with the hotel concerned on call/email
- through secretaries and administrators
- On reaching the destination from the airport by the traveller
- by the overseas office staff
Tracking and consolidation of hotels booked is unavailable. There is limited or nil visibility on where an employee is staying.
5. The practice of “Per Diem Advances” for foreign travel
Further many Indian firms, especially in the IT/ITES industry, give their employees a “per diem” - The employee is expected to arrange their stay in their destination country using this per diem. This can vary from $25-$60 per day, generally.
Generally, the employer will not ask for any receipt for the stay from the employee - IT / ITES companies actually regard such a practice as being “employee-friendly “. This is presented as a staff incentive, since the employee could technically stay with friends & family, retaining the per diem.
However, what is completely ignored is the fact that the employer has little or no information on
- where the employee is staying
- the quality of the accommodation
- the health & safety standards
- risks to employee
6. Travel Insurance - More the exception than the rule
Travel insurance is a fundamental function of a travel program especially if your employees travel overseas given the extremely high costs of medical services especially hospitalization.
Overseas medical travel insurance is still not a mandatory part of Indian business travel programs. Implementation is erratic and ignored in many organizations.
Some companies do purchase a corporate or individual travel cover. ProKonsul believes that there is inadequate employee briefing on how the insurance could be used, should a situation arise.
Many companies don’t as yet provide wallet cards & other mobile assistance to employees when they travel. Hence the overall approach with some exceptions in largely reactive - “Let something happen, the travel team will firefight the issue”.
Wake up before its too late!
Business Travel Duty of Care is defined as the corporate obligation that an employer has to secure the welfare of their employees when the employees travel on official work. The concept of Duty of Care emerged and become a major component of business travel policies worldwide post the incidents of 9/11.
In many parts of the world - like USA / Canada & Europe / Australia, this is a legal obligation of the Directors & management of the company. There have been many instances where the courts have found the officers of the company legally & financially liable for negligence.
This is not yet a legal obligation in India and in most emerging markets. Which is why there is limited or NIL CXO visibility or focus amongst most Indian companies.
Modern business travel requires much more than a focus purely on pricing and fee minimization. There are multiple aspects that have to be accorded priority to build a program that protects enterprise and employee interest while optimizing spend. A business travel consultant / India expert like ProKonsul can be called on to optimize your program & leapfrog it to the latest and best in the industry.
There is an innate desire, when it comes to Indian business travel, to keep the head buried in the sand. The assumption here being that what is not seen or heard or recognized will not impact the business!
India is targeting to be a $5 Trillion economy in the next few years. Its business travel market is the fastest-growing worldwide. It’s ranked 7th largest globally.
For business to scale and become efficient, Indian CXO’s have to spend time understanding and strategizing business travel. They need to incorporate an external business travel consultants / India experts like ProKonsul, who can help them navigate this complex domain and create global best in class business travel programs.
Don’t wait for a Black Swan moment to happen, before you wake up !!
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ProKonsul ® optimizes the business travel lifecycle of its clients. It deliver’s domain expertise in enterprise business travel. Established in 2014, it is the pre-eminent business travel consulting firm in India, Asia & emerging markets. We are located in Gurgaon, India.
ProKonsul ® advisory services are supplier agnostic & governed by a robust integrity policy.
Created on Nov 19th 2019 00:27. Viewed 206 times.