Travel savings

by Julie Dempsey, HRG Business Manager

When a new chief executive arrived at our client, one of the world’s largest security printers and papermakers, and tasked his company with reducing costs by 25%, HRG focussed on three areas; travel policy, traveller and booker behaviour and suppliers.

When it came to policy, we looked at several cost saving initiatives including a travel ban, downgrades in class of travel and increased use of video conferencing.

To tackle behaviour, we considered booking travel much further in advance and reducing the number of options held by travellers and the volume cancelled before ticketing.

For the supplier side, we looked initiatives such as moving UK domestic travel to rail, using restricted rather than flexible tickets, using the lowest preferred suppliers and rates and ways to reduce leakage.

The next step was to present the client with two proposals in a format digestible for people with little knowledge of travel; one that had minimal impact on the traveller experience but cost savings of 21% and a second, more radical plan with savings of a third but significant impact on the traveller.

The client board quickly approved a number of initiatives with further steps to be signed off in the middle of 2011. As a result, HRG is on target to deliver a saving of £640,000, 20%, this financial year. 

Providing the client with two proposals is helpful in terms of enabling them to assess the potential cost savings versus the internal impact and how much resistance there might be. The process also helps with communicating change if the management decides to take a more radical cost saving approach.