Why your business travel air miles should go to your employer

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The writer is a former investment banker and managing director at Seda Experts

“Business travel sucks . . . until I redeem my frequent flyer miles,” proclaims one T-shirt for sale. Air travel for work wastes time, damages your health, pollutes the environment and costs employers a lot of money. And it happens a lot more than it should.

Companies struggle to limit travel because employees simply can’t resist the lure of frequent-flyer points. Professionals salivate over their loyalty account balances just as Gollum fetishised his “precious” ring. I’ve come across people who’ve booked meetings in far-off places simply to achieve elite tier status.

As banks, law firms and consultancies tighten their belts, they need to stop incentivising jaunts. That means ensuring that frequent-flyer points for business travel belong to the business, and not to the employee. This would produce a “win-win-win” situation: good for productivity, good for the environment and good for employee wellness.

Covid-19 forced employees to eschew travel in favour of virtual meetings. Yes, the effects of working from home are still hotly debated, but one thing is clear: grounded road warriors experienced newfound productivity. Huge chunks of the day were freed up. No more wasted time in airports. More space for clients.

Take capital markets, where records for transaction volumes were smashed in the second half of 2020 and 2021. Bankers, lawyers, accountants and advisers flexed to manage the surge in deal flow, often before extra headcount could be onboarded. Pre-pandemic, they would have been stuck on planes.

While in-person meetings will remain necessary to commercial relationships, the pandemic exposed the productivity cost of much of that travel. Virtual deal roadshows, for example, proved more efficient, accommodating more investors than the travelling management rodeos of yore.

However, given how driven many professionals are to retain elite frequent flyer status, policing business travel is as thankless as it is fraught for employers. Ending the common practice of employees pocketing the points would make the choice between a video call and 10 hours on a flatbed a no-brainer. It would also save oodles of money.

Many (including my younger self) would say employees deserve to keep the frequent flyer miles as compensation for the inconvenience of travel. “Stealing miles from employees,” wrote a Forbes contributor in 2016, “is a loud signal that says ‘We control costs here — at our team members’ expense!’”

But frequent flyer miles aren’t just a token of appreciation, like a dog-grooming voucher simply for being employed. Rather, they are a tangible and quantifiable gain that can then be used for personal benefit. As Mike Harris of Cribstone Strategic Macro has noted, employees are being paid (tax free) to take business flights.

“People respond to incentives,” as Greg Mankiw points out in his 10 principles of economics. And when employees keep the airmiles, the incentives are to fly. Frequent flyer programmes have different tiers and travel requirements to retain a particular level. So employees are encouraged to cram in as many trips as possible. Changes to British Airways’ Avios programme — awarding points on fare paid, not miles flown — make corporate travel even more rewarding.

Instead companies should capture the economic value of business travel frequent flyer miles. That doesn’t mean forcing employees to wear a hair shirt when they hit the road. Employers can negotiate airport lounge access for travelling employees and even plough some of the savings into upgrading hotels. But they can make travel more comfortable without incentivising employees to do it more than they need to.

Didn’t I book family holidays on miles earned when working at large firms? Yes. Am I being hugely hypocritical? Perhaps! But as François de La Rochefoucauld once said: “Hypocrisy is a homage that vice pays to virtue.”

Letter in response to this article:

Air miles scheme that became a flight of fancy / From Charlie Metcalfe, Lisbon, Portugal