“Why should I spend money and time on meetings and travel?” It’s not uncommon to hear the question tossed around. People started tightening their economic belts and were looking into any and every way to cut costs, limit spending and increase efficiency. The problem with the strategy was many businesses blindly cutting spending without looking into the potential ramifications, which frequently led to more financial hardship.
According to an Oxford Economics study, “Detailed statistical modeling over 18 years and 14 industries indicates that for every dollar invested in business travel, U.S. companies have experienced a $9.50 return in terms of revenue.”
One item that continually came up for discussion was spending on business travel and group meetings. Travel budgets were first up on the chopping block for lots of companies, and the results haven’t been pretty. Proponents of the importance and value of face-to-face were overruled by hardline accounting decision makers to deleterious effect. The simple truth of the matter is personal interaction drives creativity, teamwork, efficiency and productivity, and an analysis of financial data backs it up.
Recent studies show not only did companies that spent more on business travel and meetings during the recession fare better, but also companies that continue to devote more resources to meeting expenses have rebounded faster and better from the economic downturn.
Study: Cutting business travel can hurt profits
Businesses that continued to send employees on the road during the recession were more profitable than those that cut back on business travel, a new study out today has found.
It’s a simple case of understanding investment and return, and history has shown time and again there is a lot of value packed into each minute of face time. It may seem extravagant or expensive to send employees around the world, but it’s merely the cost of doing business. So before you think about cutting travel expenses or eliminating your sales incentive program, look for other ways to control your budget.
In person meetings are the best tool to make sure each person is accountable for his/her actions, improve communication between team members and clients, and get to all those important items that seem to always be pushed down the line. Paying to put people face-to-face in the same room drastically improves the health of your business, more than pays for itself quickly, and goes a long way towards helping achieve your business objectives.