Why your employer should receive your business travel air miles

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The author of this article, formerly an investment banker and managing director at Seda Experts, sheds light on the drawbacks of business travel and suggests a solution.

There’s a T-shirt that boldly states, “Business travel sucks . . . until I redeem my frequent flyer miles.” It’s no secret that traveling for work is time-consuming, detrimental to health, harmful to the environment, and expensive for employers. Unfortunately, it’s still a common occurrence.

Many companies struggle to control travel because employees are enticed by the allure of earning frequent flyer points. These professionals eagerly keep an eye on their loyalty account balances, similar to how Gollum treasured his “precious” ring. Some individuals go to great lengths, even booking meetings in far-off destinations, just to achieve elite tier status.

In order to combat this issue, banks, law firms, and consultancies must revise their travel policies. They should ensure that frequent flyer points earned through business travel belong to the company rather than the employee. This approach would bring about a “win-win-win” situation, benefiting productivity, the environment, and employee well-being.

The COVID-19 pandemic forced employees to forgo travel in favor of virtual meetings. While the effects of remote work are still debated, one thing is clear: grounded business travelers experienced a newfound level of productivity. They no longer wasted time in airports, and their schedules became more flexible for client interactions.

Take the capital markets, for example, where transaction volume records were shattered in the second half of 2020 and 2021. Bankers, lawyers, accountants, and advisers had to adapt to manage the surge in deal flow, often without the luxury of additional staff. In the past, they would have been tied up in frequent travel.

While in-person meetings will always play a role in building commercial relationships, the pandemic highlighted the productivity costs associated with excessive travel. Virtual deal roadshows, for instance, proved to be more efficient, accommodating a larger number of investors compared to traditional management trips.

However, monitoring and restricting business travel can be challenging for employers, given professionals’ strong desire to maintain elite frequent flyer status. Ending the practice of employees keeping the points they earn would make the choice between a video call and a lengthy plane journey a no-brainer. Moreover, it would result in significant cost savings.

Some argue that employees deserve to keep their frequent flyer miles as compensation for the inconvenience of travel. Forbes contributor Liz Ryan, in 2016, criticized the act of “stealing miles from employees,” stating that it signaled an emphasis on cost-control at the expense of team members.

However, frequent flyer miles are not merely a symbolic gesture of appreciation; they represent a tangible benefit that employees can personally enjoy. As Mike Harris of Cribstone Strategic Macro points out, employees are essentially being paid in the form of tax-free business flights.

Greg Mankiw’s principle of economics, “People respond to incentives,” rings true in this context. When employees are allowed to keep their airline miles, the incentive is to fly more frequently. Frequent flyer programs have different tiers and travel requirements to maintain a certain level, encouraging employees to maximize their trips. Changes to British Airways’ Avios program, for example, have made corporate travel even more enticing by awarding points based on the fare paid rather than mileage flown.

Rather than employees benefiting personally from business travel frequent flyer miles, companies should capture their economic value. This doesn’t mean employees should suffer during their trips; employers can negotiate airport lounge access and invest some savings into enhanced hotel accommodations. The goal is to make travel more comfortable without incentivizing excessive trips.

Speaking from personal experience, I too used miles earned during my time at large firms for family holidays. I am well aware of the hypocrisy in my stance. However, as François de La Rochefoucauld once said, “Hypocrisy is a homage that vice pays to virtue.”