September 2007 - Taking heed of the seemingly growing list of dangers their travelers could face, companies are refining employee well-being policies and using outside firms to help manage risk. By investing in technology to track travelers and in service providers to assist them in emergencies, CFOs and procurement managers can minimize corporate liability and engender employee confidence, in turn driving higher compliance to travel management programs.
Some companies are training travelers to deal with crises and journeys to high-risk areas; deploying systems to monitor their whereabouts and store their trip details; establishing a range of support services; auditing supplier safety records and security mechanisms; and looking for ways to continuously mitigate risk.
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80% |
Think their company has a legal obligation to ensure their safety while traveling abroad on business |
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54% |
Carry no specific contact phone number for use in a crisis abroad |
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52% |
Would consider legal action if they were not supported properly |
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46% |
Work for firms with no clear travel security policies |
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36% |
Have little confidence their firm would provide correct information during overseas emergencies |
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22% |
Have no idea who to alert in case of an emergency |
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Source: Control Risks May/June survey of 1,039 U.S. and U.K. business travelers
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"Effective risk management ensures that a company is not at a competitive disadvantage and, when optimized, can translate into competitive advantage within a particular industry," according to a white paper from the National Business Travel Association and iJet Intelligent Risk Systems. "Organizations are increasingly recognizing not only the need to control the cost of travel, but also the need to protect the significant 'investment' that business travel represents." NBTA estimated that the average cost of a three-day international business trip is $4,000.
Costly disruptions include not only terrorism, severe weather and pandemics and other health alerts, but also violence, worker strikes and even strict entry requirements established by some countries.
Risk management "can literally translate into more productive employees who are more motivated and understand that the company is performing on their behalf," said David Marks, general manager of online services for International SOS, a provider of medical and security information and protections. "Forget the moral obligation to do so; there also is an economic incentive."
And a legal one. Companies carry "duty of care" and "duty to disclose" responsibilities, requiring them to, within reason, do everything necessary to inform employees of potential hazards and protect their health and safety. Those not maintaining a "standard of care"--the reasonable level of protection in place at peer organizations--can be found liable should their travelers encounter dangers or other problematic circumstances.
Available from many travel management companies and other third parties, traveler tracking systems are an essential component of risk management programs.
Some organizations build their own, as Lockheed Martin did six years ago. "Unfortunately, that did not work as well as we hoped," said director of corporate travel services Richard Wooten. "One of the most difficult parts is accepting all the changes [to traveler itineraries] from the travel agency and keeping that information fresh. That is a pretty complex endeavor." To meet the challenge, Lockheed outsourced the tracking system to an automation company and began using it companywide last September.
Other tools available to interested companies include risk assessment services, communications systems to keep travelers informed, data management tools that update and archive all travel-related information for audits and decision making, and evacuation services. According to the iJet/NBTA white paper, an "average" medical evacuation for an overseas traveler costs $25,000 to $30,000.
To help companies determine what they need, iJet built the Travel Risk Management Maturity Model, a benchmarking tool "loosely based on similar models found in the information technology and program management fields." Based on 10 key process areas, corporations can evaluate the maturity of their risk management programs, ranging from level one, or "reactive," to level five, "optimized." At the "reactive level," the paper states, companies are "at substantial risk and could incur significant liability for not meeting the basic duty of care for your travelers."
The benchmarking effort--including a self-assessment worksheet--is available for free from iJet or through NBTA. "It provides a language to talk up the line to senior management and say why it is important to invest in this area, " said iJet COO Martin Pfinsgraff.
