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New trend in cost-cutting? Company paid travel = company miles?

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New trend in cost-cutting? Company paid travel = company miles?

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Old Oct 12, 2010, 1:44 pm
  #91  
 
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Each company will do something different....as each company has differing value systems. A company may also have a policy for "road warriors" and one for the staff which fly out a couple/few times a year.

You can bet the "policy" won't sit well w/ the guys/gals flying every week...as they make great gifts to the family or for family vacations, spend the time in airports, gain the extra lbs from not having home cooked meals and time away from family..they have a LOT higher perceived value than the employee who flies a few times a year and it wouldn't feel like they are "giving away" as much..and any policy saying they won't earn those miles would be MUCH more palatable to them, than to any road warrior.

As was said above, it may fly for a while b/c some executive says "I estimate it'll save our company blah blah blah"...and pads his/her numbers to look good, or totally doesn't take into acct. the managing of those miles, be it oversite of the flyers, manage of mile pools, and usage of those miles, or outright mutiny by the ppl they depend upon.

In the end, "it's a cycle". When times are good, companies don't have to find those ways to cut costs. When times are tight, they find ways to cut costs and save money. Each company has their own value system and their areas which are verboten to touch.


As to "gov't workers are paid less"...please compare apples to apples. i.e. total compensation. Studies have shown gov't workers are paid more, on avg, for similar jobs than the private sector. That doesn't include hard to measure factors such as job security either. Also, it's rare I've seen many gov't/state workers work overtime...if they did...it was 1hr OT, 1hr .....ing about the 1hr of OT they worked the previous day. Private sector works OT all the time, has relatively little safety net in terms of job security and, for the large majority, don't have pensions waiting for them upon retirement.


Hypothetical:

Say you do take away the benefits of those miles/points...on the fringe, you will have ppl who outright quit. Closer in, you will have those that no longer take the "cheaper flights" or go out of their way to save the company money....costing the company more $$$...Closer in still, you will have those that will slowly no longer take time out of their schedule to make an 8am Monday morning meeting and instead say they will fly out at 8am on Monday and to reschedule the meeting. In short, the company looses productivity from those workers. If the company forces the issue about leaving on Sunday, some of those workers will now quit for greener pastures.

What I'm getting company philosophy, mentality and policies will play a good part in how it will play out. Some companies may feel they can "get away with it" b/c they feel "we're the best company to work for and give great benefits, they'd be fools to quit our lucrative retirement/vacation/etc incentives over a few FF miles and/or hotel points"...while other companies may face attrition b/c they're an OK company to work for, but if someone can find a similar job but keeps the perks and may even get a pay raise out of it....the company lost out again.


I digress...I'm in the camp of..."you flew 'em, you earned 'em". Because the most likely scenario is the miles/points will just go into a pool and be showered upon the executives and then some "giveaway" to company employees for "free tickets"...not to mention, if they are taken away...salary should be increased for the inconvenience of delays, sunday/friday night departures, away from home, extra expenses related to travel. The assumption lies with med-large companies....companies with scant road warriors or very few employees has a lot less headaches and management to deal with.

Last edited by dgoedken; Oct 12, 2010 at 1:53 pm
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Old Oct 12, 2010, 2:37 pm
  #92  
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Originally Posted by saad
if this were made clear to me at the time of hiring then i guess i would have no reason to complain afterwards....but i would definitely not be happy with this policy if they told me after i was hired & before i started my regular travel....
If you're being hired for a job that involves (or may involve) a lot of travel, the smart thing to do is to inquire about these policies before accepting an offer. Never make assumptions one way or the other.

Obviously, that won't help in cases where a regular desk job picks up responsibilities that require travel.
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Old Oct 12, 2010, 2:39 pm
  #93  
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Originally Posted by rajuabju
My company has this policy and no one has ever complained.

Employees fly Southwest, use Avis car rental, stay @ Holiday Inns. This is a policy made clear to all employees at time of hiring (or prior to starting regular travel).

All points and rewards accrued go towards redemption for future flights/hotel stays. It has saved the company thousands of dollars annually on travel costs.

Also:

1) Employees still gets the benefit of being A-List and also companion pass, which benefits them personally.

2) Employees still get benefit of Avis car upgrades for personal rentals (and also are allowed to use corporate rate for personal rental).

3) Employees still get benefits of Platinum tier for personal stays at any IC hotel.

Granted, its a small company and we only have about 6 people who travel, but its worked out well for both sides, IMO.

Thanks for sharing. You bring up a good point here: status miles/points still retained by the individual flyer to get perks like bypassing the normal people's lanes, priority boarding and preferred seatings for road warriors on a busy schedule, while the person/company keeps the redeemable miles/points for future business travel as necessary.

I think that's pretty fair enough; the individual still retains the miles/points/segments that counts toward elite status or credit of hotel nights/stays to retain their elite benefits like priority check-in, priority security lanes, lounge access, priority boarding, preferred seatings and upgrades to still get through their business travels smoothly. And these perks still could be used on their personal travels with their family.

The redeemable miles/points however will get credited to the person or company that paid for the airline ticket or hotel stay; which will give them them the choice how to use them, whether it be converting those excess miles at points.com for something else, redeeming them for flights to send some of their team to a tradeshow overseas, or rewarding employees at the end of the year.

Any other thoughts on this? Sounds pretty fair to me as it doesn't take everything away and it's the middle ground between retaining elite status for the individual flyer and providing cost-savings for the company.



BTW, can you tell me how your company is able to manage the accounts? Do they have a special department that keeps track of earned miles/points of all the employees, and telling them when to use them?

Last edited by kebosabi; Oct 12, 2010 at 2:47 pm
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Old Oct 12, 2010, 6:25 pm
  #94  
 
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Originally Posted by libuser
I work for a large gov contractor company - 80 000 employees plus in the US, and 6 months ago we moved to the cheapest carrier, and cheapest hotel(based on rank within the company), and of course no miles/points for either. That was a big hit, a lot complained, some left, but no changes. It looks like it will be adopted everywhere pretty soon.
No, it doesn't.
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Old Oct 13, 2010, 1:25 am
  #95  
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Originally Posted by nkedel
If you're being hired for a job that involves (or may involve) a lot of travel, the smart thing to do is to inquire about these policies before accepting an offer. Never make assumptions one way or the other.

Obviously, that won't help in cases where a regular desk job picks up responsibilities that require travel.
personally, i would definitely get this cleared up before i took the job....but i feel it is the responsibility of the company to inform the employee at the time of hiring....
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Old Oct 13, 2010, 1:26 am
  #96  
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Originally Posted by libuser
I work for a large gov contractor company - 80 000 employees plus in the US, and 6 months ago we moved to the cheapest carrier, and cheapest hotel(based on rank within the company), and of course no miles/points for either. That was a big hit, a lot complained, some left, but no changes. It looks like it will be adopted everywhere pretty soon.
why would you think that????
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Old Oct 13, 2010, 2:06 am
  #97  
 
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Originally Posted by nkedel
If you're being hired for a job that involves (or may involve) a lot of travel, the smart thing to do is to inquire about these policies before accepting an offer. Never make assumptions one way or the other
It makes sense that if you are interviewing for a job that requires a fair amount of travel, ask to see the travel policy. This shouldn't be confidential, so the company should be fine to share it with you prior to making an offer and signing an employment contract.
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Old Oct 13, 2010, 2:19 am
  #98  
 
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I was asked to travel frequently only after I joined the company. Naturally I do not get compensated for the frequent travel so if the miles and hotel points are taken away I would either demand a raise or leave.
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Old Oct 13, 2010, 7:23 am
  #99  
 
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If you refused the travel, would the company fire you, the way they can if you refuse a relocation? (By the way, I hear some companies now make their employees pay for relocations.)
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Old Oct 13, 2010, 8:32 am
  #100  
 
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Originally Posted by kebosabi
Thanks for sharing. You bring up a good point here: status miles/points still retained by the individual flyer to get perks like bypassing the normal people's lanes, priority boarding and preferred seatings for road warriors on a busy schedule, while the person/company keeps the redeemable miles/points for future business travel as necessary.

I think that's pretty fair enough; the individual still retains the miles/points/segments that counts toward elite status or credit of hotel nights/stays to retain their elite benefits like priority check-in, priority security lanes, lounge access, priority boarding, preferred seatings and upgrades to still get through their business travels smoothly. And these perks still could be used on their personal travels with their family.

The redeemable miles/points however will get credited to the person or company that paid for the airline ticket or hotel stay; which will give them them the choice how to use them, whether it be converting those excess miles at points.com for something else, redeeming them for flights to send some of their team to a tradeshow overseas, or rewarding employees at the end of the year.

Any other thoughts on this? Sounds pretty fair to me as it doesn't take everything away and it's the middle ground between retaining elite status for the individual flyer and providing cost-savings for the company.



BTW, can you tell me how your company is able to manage the accounts? Do they have a special department that keeps track of earned miles/points of all the employees, and telling them when to use them?
My company only has 6 people that do traveling; we have one of the executive assistants handle all the travel arrangements, and she also handles the tracking of miles/points/redemptions. I think that if this were tried in a large scale (like a hundred employees traveling) it would probably become a mess.
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Old Oct 13, 2010, 9:23 am
  #101  
 
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What would be the incentive of an airline to implement this? An exclusive contract? Maybe, but that would only work with very small companies and the accompanying revenue wouldn't be able to justify costs associated with changing their IT systems.

Airlines would never spring for this and in the FF game, the airlines hold ALL the cards.

For those that think this is feasible, what's in it for the airlines?
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Old Oct 13, 2010, 9:43 am
  #102  
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How much will you pay the people to manage the Companies miles? Remember, the company would likely have numerous accounts and some airlines likely would not participate... Negotiation with each airline would likely be needed.
How does this compare to the fare savings?
Will the company try to get real value out of these Miles, or more likely burn them on any $99 trip that the seats happen to be available for?
How long will it take for EVERY person to book a trip now, since online/electronic booking via employee self service won't be possible?

These are several reasons that I have heard in the past, when our company revoked a similiar policy.... There just wasn't any savings there.
You can't compare a last minute $5,000 Business seat to LHR, to an award seat that may or may not be there. (Change restrictions, fee's, etc)

I also saw a company once try to stop allowing the expensing of GPS devices in rental cars. So after 3 months they noticed that numerous costs increased because everyone was taking cabs/car services... A correction was sent out, and they can now be expensed again.
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Old Oct 13, 2010, 11:23 am
  #103  
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Originally Posted by ramalama8
What would be the incentive of an airline to implement this? An exclusive contract? Maybe, but that would only work with very small companies and the accompanying revenue wouldn't be able to justify costs associated with changing their IT systems.

Airlines would never spring for this and in the FF game, the airlines hold ALL the cards.

For those that think this is feasible, what's in it for the airlines?
It's not feasible. In fact, the entire concept of frequent-flier miles is completely based on the fact that employees get to keep the miles. I'm sure if anyone alive today was sitting in the room at whichever marketing agency first began storyboarding this entire universe in the late 1970's, this was THE primary use case.

Sure, an airline could cut an exclusive deal with a company and withhold miles. The exclusivity is the thing that would be in it for them - if they got that contractually in writing, it would eliminate the need to build stickiness with FF miles. I just don't see how that's contractually enforceable for feasible. Most big firms cut similar deals with a couple different majors - whatever they need to cover their client map with airlines' route maps.

As for whether I'd do a deal with a client that included giving up my RDM's, sure...I suppose I'd consider it a negotiable element of the deal. I do know people who have done this in exchange (usually implicitly) for a favorable term elsewhere. Fortunately, I've never worked for an employer or client that has poked and prodded to quite that level of detail - because FF miles aren't really an asset and aren't easily tracked in any common enterprise-wide COTS application that I'm aware of, most people find it's too much effort to track too little value.
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Old Oct 13, 2010, 12:14 pm
  #104  
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Ok, let’s leave aside the feasibility, the computer database programming needed, or hypothetical scenarios of mass revolt from road warriors alike, etc. etc., all that aside for now.

I’m sure we all agree that common sense wise, the person that’s paying for it should be entitled to at least some portion of the reward and not just the user; just like the person who bought that 40” LCD TV for the living room out of his own dime earns the BestBuy Rewardzone points and not the roommate who hooks up his Xbox360 to it and plays GTA IV all day and having the nerve to ask him if he can use the Rewardzone points earned from the purchase of the LCD TV to buy the new GTA IV expansion pack

Let’s start off with a simple yes/no question:

Should the person/company/NPO/government that pays for the travel expenses be entitled to their fair share of miles/points? Doesn’t matter if its blue-chip Acme Corp sending corporate road warrior John Doe to China, or you the small business owner paying for the contractor’s travels from Dayton, or the dad paying for his in-laws’ airfare to visit their grandkids in Arizona, or the American Red Cross sending volunteers to help AIDS in Africa, or Senate and House Representatives in Congress going back-and-forth between their home state and Washington earning miles for self-use with tax-payer dollars?

Last edited by kebosabi; Oct 13, 2010 at 12:28 pm
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Old Oct 13, 2010, 1:34 pm
  #105  
 
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Originally Posted by pinniped
Sure, an airline could cut an exclusive deal with a company and withhold miles. The exclusivity is the thing that would be in it for them - if they got that contractually in writing, it would eliminate the need to build stickiness with FF miles. I just don't see how that's contractually enforceable for feasible. Most big firms cut similar deals with a couple different majors - whatever they need to cover their client map with airlines' route maps.
Like you alluded to, an exclusive contract with one airline would only work for very small firms. For large firms with many employees and many locations, there's no way. The deals that big firms currently cut are for a price break, not exclusivity.

So again, and in agreement with you, it's not something that would happen.
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