Businesses Spending Blindly On Their Mobilized Employees

Employee travel has been an area of innovation and technological advancement in recent times, but the space is far from where it should be, according to Runzheimer.

The company, which provides services for businesses with a mobile workforce, published new analysis on where businesses are falling short when it comes to managing their traveling employees and the corporate money they spend.

In a nutshell, research into the mobile workforce management space reveals a lack of transparency and automation across a variety of processes, from insurance policies to T&E.

“For companies to improve the visibility into existing workforce mobility programs, organizations need to increase efficiency through the use of automation and technology,” summarized Runzheimer President Randy Mueller in a statement.

Breaking Down The Numbers

Runzheimer’s report breaks down the financial data on how employees are spending corporate funds while outside the office.

For corporations with employees who travel on the road for work, there is a significant lack of visibility into what these workers are doing.

For example, according to the data, nearly half (46 percent) of companies told Runzheimer that they do not verify whether their employees that are driving for business purposes have the proper insurance policies.

Nearly two-thirds of companies said they use more than one business vehicle program, which could also lead to a lack of visibility into what their employees are doing while on the road for their corporations.

That’s bad news considering how much companies are paying for their mobile employees.

Runzheimer found that, on average, companies spend $9,843 on each driver, with an average of $0.67 spent per mile traveled.

When it comes to travel and expense management solutions for employees making purchases outside office walls, the results of Runzheimer’s analysis also yielded some concerns. According to the data, nearly half (48 percent) of companies surveyed said they use a manual process to record mileage of a business trip, for example.

The use of manual processes can similarly hamper transparency into the corporate travel space and, again, may be a problem considering the financial investment businesses place in their traveling employees.

The average cost of a business trip for employees at the companies surveyed is $2,726, said researchers, with annual costs of corporates’ direct spend and support spend on employees who travel hitting $12,152.

Some of that money, however, may be improperly spent on employees or reimbursed back to them.

Runzheimer spoke with PYMNTS earlier this year to discuss the threat of expense fraud. According to the Association of Fraud Examiners, 5 percent of revenues can be lost to expense fraud, and the biggest culprit is mileage reimbursement, where employees inflate the number of miles they drove.

“When you turn in your mileage, you are typically doing so without receipts,” explained Director of Product Innovation Matt DeWolf. He added that manual mileage tracking, which appears to be widespread, according to the most recent report, not only leaves room for reimbursement claims but can lead to a company falling out of compliance with regulations.

There was good news, however, as 75 percent of companies told Runzheimer they have an automated solution for at least some part of the expense management process.

“Our hope is to help organizations understand the key drivers that are impacting workforce mobility programs each year,” Runzheimer’s Mueller added in his statement regarding why the company produces the research report. This is the company’s 10th year releasing its Mobility Benchmark Report.