Travel Expense Practices Remain Stable, Despite Rising Costs

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The 2012 EAA National Sales Compensation & Practices Survey, which surveyed nearly 800 organizations throughout the United States, shows that employers are reimbursing sales employees for a number of different travel expenses.

  • Over 80% of employers pay for economical air fare and around 10% pay for business class air fare. Over 90% of employers allow employees to keep their air fare frequent flyer miles for personal use.
  • Over 85% of employers reimburse for most transportation-related expenses including bus and cab fares as well as parking and highway toll fees. Slightly fewer organizations reimburse for transportation-related gratuities.
  • Company cars are only provided by 32% of respondents, with most employers (over 80%) reimbursing for employees’ use of their personal cars. About two-thirds of employers reimburse via straight cents per mile (typically at the IRS rate) and 20% reimburse via a combination of straight cents per mile and a flat amount per month to cover general vehicle wear and tear.
  • The widespread majority of employers do not clearly define expense reimbursement practices pertaining to entertainment, lodging, and meals. Over 70% of employers indicate that they simply reimburse for reasonable expenses related to these.

The survey shows that travel expense reimbursement practices for sales professionals have remained relatively stable with little change over the past five years, except for a slight decline in the use of company cars, a slight increase in mileage reimbursement, and an uptick in the number of employers simplifying their reimbursement practices for entertainment, lodging, and meals.

As gas and transportation prices continue to rise, however, employers need to ensure that their travel reimbursement practices continue to keep pace in order to attract and retain top sales professionals whose work involves significant travel.

“We’ve found that travel expense reimbursement can sometimes be a retention issue for sales employees – especially when employees perceive expense reimbursement practices to be unfair or not in line with what is provided by other companies, or when the costs of paying for transportation begin to affect their compensation,” says an ERC HR Consultant. She explains, “To retain quality sales people, employers need to be mindful of how rising gas and transportation costs are impacting their sales employees’ take-home pay.”

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