Improve policy compliance
Don’t let all the hard work of putting together a good travel programme be undone by maverick travellers. We profile one public sector business whose travellers play by the rules
Most travel managers understand that the hardest thing to change is people’s behaviour, but when potential savings of ten per cent are at stake then that can really drive a project.
The Government’s Department for Work and Pensions (DWP) asked their then supplier, Carlson Wagonlit Travel (CWT) to propose a number of practical changes to booking travel, specifically incorporating online technology. CWT work mainly in rail travel, and 90 per cent of DWP’s spend on rail travel was concentrated through them.
Matthew Griffin drove the project and has been recognised by his peers for the work achieved. DWP is now in the vanguard of the public sector, alongside the Home Office and HMRC.
DWP has around 110,000 staff and although we’re talking mega numbers – a travel spend in excess of £67million and some 6,000 regular and largely domestic travellers – the actions the business took are pertinent to any size of business, including those at the SME end of the scale. Read on for how DWP tackled compliance issues head on.
STEP 1: Griffin was a relative newcomer to public sector as he was previously with supply chain consultancy WS Atkins. The scope of the role at DWP excited him and he joined DWP’s Leeds office in March 2009. In his first month, Griffin set tough targets to cut travel costs and concentrated on demand management. “I wanted to really push the envelope and start the ball rolling,” he says. “It was a bit of a shock to everybody but they’ve grown to love me, a bit!”
Compliance was a clear issue as the travel policy hadn’t been revised for a couple of years and the online booking tool was hardly used. On the plus side, transactions were running efficiently and smoothly. The big money waster was first class rail travel. “I’d never travelled first class,” says Griffin. “How can you justify spending £300 in first class when you can do the same journey for less than £100?”
STEP 2: Work began with top-down communication, creating a forum of representatives from each of the 15 different parts of the business (eg Jobcentre Plus, the Pensions, Disability & Carers Service and other agencies), and including the finance community.
“It was a massive communications project over three months, all on our intranet, plus messages on our booking tool, booker network and by email communications,” explains Griffin. “If something’s right and you explain why you’re doing it, travellers will follow suit,” he firmly believes.
“Communication is key. Messages were going out before we launched it saying, ‘Be prepared’." The message linked policy changes to the importance of business travel’s contribution to a wider cost avoidance strategy. As the project progressed, robust MI helped maintain the momentum of change.
STEP 3: A new, strengthened travel policy was introduced and was detailed on the business travel website. To drive greater compliance, it outlined the importance of travel avoidance, value for money, pre-trip approval and mandated the use of DWP contracts.
First class rail was banned on journeys of under two hours and restricted at other times to save an estimated £10million per annum. This was a huge cultural change as certain grade employees were entitled to such travel. First class travel pre-trip approval was also introduced.
There was some initial resistance to the change, chiefly from travellers complaining that they wouldn’t be able to work on the train. The sizeable 40 per cent of travel soaked up by first class rail in 2009 dropped to a mere two per cent within a month.
At the same time, there was a ban on flights for single journeys of less than 300 miles. Griffin notes that they’ve achieved higher productivity levels despite the longer train journeys.
STEP 4: DWP is dispersed around the country, with a network of hundreds of Jobcentre Plus offices in England, Scotland and Wales, so training all the bookers was a potential challenge. Roadshows were out of the question so CWT put together training material in the form of online guides and provided DWP with exception reports.
STEP 5: Promoting the use of fully flexible fares and advance booking on rail was the next step. Rail bookings made within two days have been whittled down to 20 per cent from a high of 24 per cent in 2009. DWP has had more success is reducing the use of fully flexible tickets, down from 47 per cent in 2009 to 40 per cent, while the use of restricted fares has risen from 35 per cent to 60 per cent.
STEP 6: The Government’s focus on reducing the deficit undoubtedly gave DWP’s savings programme a boost. “The travel team were constantly promoting these fares but support from the board was instrumental in making this all happen,“ says CWT’s Kelly. Griffin agrees: “The need to cut costs definitely built momentum and helped us achieve savings more quickly.”
STEP 7: DWP banned flights between certain key domestic city pairs, ie London-Newcastle, London-Glasgow and London-Manchester. In addition, it banned business class on international sectors less than four hours, with a total ban on domestic air travel in business class.
STEP 8: The results were nothing short of amazing. Average ticket price on rail came down by somewhere in the region of 45 per cent, not just from taking first class out of the equation, but from behaviour change, such as more use of advance booking, restricted tickets and off-peak fares. Air volumes were down 60 per cent as a result of the modal shift from air to rail, which also delivered a more sustainable mode of travel. The reduction in emissions achieved to date has been a 56 per cent fall from 798.59 to 350.16 tonnes of carbon dioxide.
STEP 9: The drive for savings continues, pushing for more use of advance booking and restrictive tickets, and less first class rail. An air booking tool will be introduced this summer – a natural decision with 99 per cent of air being domestic – and a hotel booking tool through Expotel before that.
DWP is working with the TOCs to get deals in the face of increasing fares but has taken cost per mile down as low as it can. “All we can do is reduce the volume and demand now and use more web technology,“ says Griffin. “Our focus now is on videoconferencing (VC), to stop unnecessary travel happening.” VC usage has doubled to some 2,000 hours a month. That move was reflected in the reduction of 30 per cent in the number of rail tickets purchased in 2010/11 compared with 2009/10.
Overall, some £27million was wiped off the travel spend in 2010 and the business was set to shave another £6million off the following year. Looking back, Griffin admits, “I didn’t realise what I was taking on. For the first three months I thought, ‘Oh my God, I’ve never worked so hard‘ but it was enjoyable as it actually felt like I was making a difference.“
For other companies planning to set off on this same savings journey, he stresses that, “Nothing we’ve done is complicated. It was, book in advance and book fixed tickets and, before that, ask, ‘Do you need to travel?’ No matter how big or small you are you can get a return on investment for any travel you do. The savings are there to be had.”
CHECKLIST TO SUCCESS
• RAIL TRAVEL: Prohibit fully flexible return tickets and restrict first class based on journey time.
• AIR TRAVEL: Prohibit fully flexible tickets and prohibit flying on journeys less than 300 miles.
• CHANGES TO TRAVEL MANAGEMENT: Pre-trip approval, mandate use of VC for non-essential travel, encourage travellers to book their own travel, and for all air travel to be booked through online tools. Travellers must select lowest emitting transportation type. Focus on compliance monitoring and reporting. Enable lowest transaction cost via online tools.
• COMMUNICATION: Explain why the changes are being made to ensure buy-in at all levels.