Why HR professionals should put employee spend on their radar

Author and thought leader in general business and human capital management, Jenny Dearborn, shares in her most recent book, The Data Driven Leader, that HR professionals should feel encouraged to transform by using data to help make decisions grounded in facts versus opinions, identify root causes behind a company’s thorniest problems and move toward a winning, future-focused business strategy.¹ Dearborn, who is also the Chief Learning Officer and Senior Vice President at SAP, guides her readers on how to identify and execute effective data analytics initiatives.

While there is certain data that’s obviously a go-to for HR, such as data on retaining high performing talent, a new data set that HR is beginning to use more often is encompassed within employee travel and spend areas. Why does this data matter now to HR?

Accurate and up-to-date travel and employee spend data enables the business to uncover information that can help mitigate these two key enterprise risks where HR plays a pivotal role: duty of care and interstate and global tax compliance. However, not all data that can help with these issues is created equal across an enterprise.

On the radar: Duty of care

Managing the health and safety risks of employees traveling or relocating abroad has been on the radar for many U.S.-based companies with a global footprint for decades. However, in the last several years, this risk has elevated into a moral and legal obligation to an employer. HR is truly at the center of managing an employer’s duty of care and part of that obligation requires employers to do their best to prepare, track and inform employees of any medical or security risks that they may encounter.² To properly carry out this effort, companies need to know where their employees are heading or residing at all times, especially in an event of a crisis. Data that contains travel itinerary information is often the source and is placed into a tracking solution with texting capabilities. Savvy companies are now getting smarter by pulling in additional data that’s being booked outside of corporate managed systems from direct suppliers like IHG, Starwood, Uber or Airbnb. Data from HR systems can also be placed into a tracking tool to ensure better quality data. For example, in the event of a crisis, the security team needs accurate phone numbers to text or call an employee and HR data can help ensure that it’s optimal.

Mitigating the tax trap: Interstate and global tax compliance

Interstate and global business travel tax wasn’t considered a significant tax issue or enterprise risk for company organizations a decade ago. That’s all changed now. Tax authorities and immigration officials are sharing information more broadly, thus companies are paying millions each year. Quite often, HR and global mobility has a role in mitigating this risk, especially with expatriates. As companies try to fine tune their policies and processes with various solutions and stakeholders, it has become evident that visibility to reliable travel data and advance tracking capabilities are key to mitigating this risk. Many companies are searching for a “single source of truth” around this area so proper risk assessment, analytics and recommendations to the business can be made for mitigation purposes.

A single source of truth

As HR aligns more closely with stakeholders from travel, procurement, finance, AP and outside suppliers, they need to ensure the data they’re analyzing is reliable, consistent and inclusive before a change in procedure/policy or a recommendation to the business is made. Here are three questions HR can ask others to ensure data that falls in the travel, expense and employee spend areas is accurate and connected:

1. Are we making it easy for employees to book travel or report spend with digital tools or is it an administrative nightmare?

Employees today expect mobile, consumer-like experiences at work. “Going digital” in the workplace is often a corporate initiative. If a company is not delivering the tools and functionality they want, and thrusting a frustrating, inefficient process on them instead, companies will have trouble capturing accurate travel and spend data. A Forrester research report found that, “Employees are embracing new digital capabilities in their personal lives to make purchases, and they now expect their employers to support those same capabilities as they relate to employee-generated spend.”3

Concur’s mobile app enables users to easily change a flight on their phone in a matter of seconds and lessen anxiety. According to a Booking.com survey of over 4,500 business travelers, 93% feel stressed at some point during international trips. Specifically, 38 percent reported the logistics of travel –from pre-travel planning to arranging transportation and managing expense receipts–as their biggest stress on a trip.

1. Are we using new ways to capture all employee travel outside of our traditional corporate travel processes?

Despite strict travel policies and procedures, employees are booking travel outside of company guidelines whether for convenience, cost or business need, and getting reimbursed for it. There’s definitely a “leakage” issue that exists in every company. Also, fueling this missing data are travel suppliers putting millions of dollars into clever marketing and loyalty programs encouraging your employees to buy directly from their airline, hotel, taxi service or short-term lodging. There is new technology that can help companies uncover this “leakage” and reconcile it with actual spend without chasing the traveler or pushing another policy on them.

1. Where is the data?

As we look at how employees are booking travel or spending company dollars, there’s a real disruption and shift taking place even in the ways they secure payment. Employees are spending more money across more spend categories, and using more payment methods than ever before—including, credit cards, ghost cards, checks, cash and P-cards. These payment methods are likely managed by multiple systems that don’t connect or share data across the organization. Ensure your company is connecting the travel and expense data so you are getting a big picture view of actual travel and spend in one place in order for proper analysis to take place.

If your company is failing to capture travel, expense, payment and other spend in one place, then perhaps HR can take a lead role or lean on those in the organization to do so. As Dearborn recommends in her book, HR needs to take a lead role and use data to help guide important decisions. This may be one initiative to consider and drive internally.