Travel risk management is the process of evaluating and identifying areas of risk, vulnerabilities and threats to all aspects of a business - from revenue streams to stock management and supply chain problems.
Identifying new risks is part of the on-going decision-making process within a business. It's important for a business to carry out risk assessments on a regular basis to be sure that there’s a plan of action in place in case the worst-case scenario occurs.
There are different types of risk management; from the issues a business might face on a day-to-day basis, such as cybersecurity threats and cyber-attacks, to financial trading companies who look to risk avoidance and risk management methodologies when trading in the financial markets.
Risk management is often a concern at board level, which is likely to require the various departmental stakeholders to carry out risk identification so as to ensure that their area of business minimises risk as much as possible.
In large organisations, teams might be dedicated to monitoring risks and dealing with risk mitigation, so it's common to find a risk manager working across the business providing risk management plans for the entire organisation.
Corporate risk management can cover a lot of ground and involve a wide range of management tools and contingency plans to prepare a company for the worst-case scenario. Some companies treat risk as another project management issue and will put a project manager on the case to work with stakeholders.
Risk management is all about the mitigation of adverse effects on the business. Where there's risk, there's potential for both profit and loss. Risk management will look for ways to reduce the likelihood of damage to the business.
Risk treatment methods
There are a number of different ways risk can be handled in the workplace to make sure the company’s risk is reduced and business continuity is maintained.
Risk Avoidance - It's possible to avoid risk all together in certain areas with active risk evaluation. For instance, instigating a policy of working from home is a method of risk avoidance that has been implemented over the past few years.
Risk transference - You can insure against risk. There are many insurance policies out there that can cover you against certain types of risk. This is a form of risk transference, where the risk isn't removed or actioned against, but will cover a company if the worst case happens. Simple insurance policies such as building insurance, to cover against fire and damage, for instance, is a form of risk transference.
Mitigation - A more pragmatic option is to accept elements of possible risk but mitigate it through planning and procedures. Prioritising acceptable risks and those that could be more damaging to the business, for example, is not a complete solution, but it can help prevent major issues arising.
Ignoring it - One method is to simply ignore risk and deal with any negative problems as and when they come up. Business usually involves some form of risk, and it’s possible to not concern yourself with potential issues until they occur. This isn't necessarily the best solution because it can open your business up to significant issues if things don't go to plan!
Employee risk management
Another area of a business where risk management needs to be considered is employee risk management. Sometimes this is an overlooked aspect of a business but can be very costly if problems occur. So, a proper risk analysis needs to be carried out to reduce the potential for financial risk.
Employee risk management initiatives often fall within the remit of Human Resources (HR), but other teams and individuals may be involved if there's something specific that needs to be addressed by other departmental issues and risk.
Employee risk management is often related to the potential impact and overall risk in the workplace itself. However, in the modern world, employees may travel globally on behalf of their employer, so it's common to put in place travel risk management solutions because there are a number of significant issues and risk factors relating to travelling for business.
Risk management in business travel
Issues surrounding employee health when travelling and health crisis in certain locations is nothing new. Issues such as civil unrest, travelling to dangerous locations, and even natural disasters all need to be considered when assessing risk in travel. A business has a duty of care to its employees and to reduce and manage risk as effectively as possible.
You can get insurance policies from your insurance company to cover many elements of risk, but you'll need to check carefully what is and isn't covered.
How Egencia can help with travel risk management
If you're looking to reduce your organisation's risk and want to optimise how your company implements duty of care for employees, then Egencia can help.
Traveller risk management needs to cover duty of care responsibilities across the entire travel cycle of an employee's business trip. From travelling to a location, while they're at the location, and on their return journey to the office or home. If an employee is travelling on your behalf, then their safety is your responsibility. This could even mean stopping them from travelling in the first place if it isn't safe to do so.
Understanding risk - The first step to creating an effective risk management strategy for travel is to understand what the potential risks are and to have a travel policy in place to negate these operational risks. Ultimately, you'll need to go through a process of identifying risks. The risks identified take into account all the project's risks on a large scale and enable accurate planning.
Create a risk management plan - If you don't have a risk management strategy in place, or if it's not effective, your employees may be exposed to risk, leaving your business open to potential legal action. Risk response is also essential for teams - how will departments respond, who will be responsible for the task, and how will the corporate risk register align with day-to-day operations?
A risk management programme must be dynamic and flexible, so that it can be modified when the need arises. It must also involve the employees themselves, who often have an idea of the risks faced. Everyone's understanding of risk is different. The company must therefore understand where the boundaries lie for the employee, comply with statutory regulations and develop a travel policy that suits all parties concerned.
Create effective risk management policies - With Egencia, you can block travellers from booking certain locations, and even limit the number of employees that travel together. For instance, you can set a limit to the number of employees that can book the same flight at any given time.
The process begins as soon as a traveller tries to book travel or accommodation in a location that has an active alert. The Egencia Travel Advisor can inform travellers about any health warnings or updated entry documentation required to guide and educate an employee on the potential risks involved.
Educate employees about risk - There isn't much point in comprehensive risk management practices if your employees aren't aware of them and don’t know what to do if a situation arises. Employee training must be at the forefront of any risk management plan. Risk is a conversation that employees need to have. They need to understand what constitutes a risk and how to deal with a crisis if it occurs.
Locate and contact employees to mitigate risk - The next step is to understand where your employees are when they're travelling and what risks and issues might be encountered in their location. Being able to contact employees in real time is a key advantage of Egencia's Travel Tracker tool. If a natural disaster occurs, or there's a chance of an unexpected problem such as civil unrest, you'll be able to contact your employees quickly, advise them to leave the area and help them to plan alternative means of travel, swiftly and easily.
Traveller communication and travel support - Perhaps, you're not even aware of a potential risk developing. Things can move quickly, and often the traveller themselves identifies a potential risk. With Egencia, travellers in North America can use the AssistMe tool in their app to request a callback from a travel consultant.
Benefits of a risk management plan
Saves the company money - Risk can be an extremely costly issue and, in some cases, might cause problems so severe it could even impact whether a company can trade or not. Employing risk management strategies can avoid these potential eventualities.
Avoids regulatory issues - No company wants to break the rules when conducting business, but many companies have ended up on the wrong side of the law - either through their day-to-day trading, or due to other areas such as employee law. Understanding the risks can mean avoiding fines and penalties.
Reduces litigation and liability issues - One risk a company may face revolves around litigation, liability, and other legal issues. You can protect yourself against these risks by understanding them, planning ahead, and even taking out insurance.
Improves employee relations - Employee retention, improved motivation and higher morale are all benefits a company can enjoy if it has a comprehensive employee risk management plan in place. If an employee is unhappy due to working conditions, and this unhappiness stems from issues of safety, having an effective risk management policy can help alleviate many of these concerns.
It’s better to tackle the issues than ignore them. While many issues relating to risk can be dealt with internally, it's also useful to look to third-party providers for support. It's important to select the right partners who can help your company avoid risk.
When it comes to risk management and duty of care in the corporate travel industry, Egencia is here to help.
Contact Egencia today to learn more and request a demo.