Travel and corporate hospitality feel pinch

Andrew Taylor, Employment Correspondent

Employers have cut spending on business travel and client entertaining as they look for other ways of reducing costs to stave off damaging redundancies, a study reveals on Monday.

Some 38 per cent of organisations reported that they had reduced business travel expenditure, with cuts likely to be deeper in the private sector than the public sector, according to a survey of almost 900 employers conducted by the Chartered Institute of Personnel and Development and consultants KPMG.

Some 60 per cent of employers cutting travel expenditure said they had reduced international trips, while 69 per cent said they had cut the expenses staff are allowed to claim. Almost two-thirds reduced the use of first-class travel, while 55 per cent said they had cut client entertaining.

Almost two-thirds of employers increased their use of tele/videoconferencing, while 43 per cent increased their use of public transport, the study rep­orted. It said: “While redundancies have understandably been making the headlines, ‘surviving’ employees have also been affected by the credit crunch.”

Employers, for example, were much more likely to refuse requests for overtime and training, while 20 per cent said they had axed free drinks and biscuits at company meetings.

According to the study, 21 per cent had seen a decrease in the number of training requests accepted, while 31 per cent said their organisation had responded to the credit crunch by reducing the number of overtime requests accepted.

Tim Payne, head of human resources at KPMG, said: “It’s no surprise that organisations are reining back on non-essential spending and scrutinising their policies carefully. What is important is that policy changes are made sensitively and in a way which preserves goodwill.”

Almost half of organisations said that workloads of remaining employees had increased during the downturn, while 46 per cent said that employee stress levels had increased. Employers, however, had so far seen “little impact from the credit crunch on issues such as absenteeism, productivity, number of disciplinary hearings, working hours or conflicts in the workplace”.

A majority of employers said that they were communicating with staff more regularly, with almost three in five reporting that they were using more regular communication from their senior management.

Gerwyn Davies, public policy adviser at CIPD, said: “While our greatest sympathy should be reserved for those who are losing their jobs during the recession, the effects on surviving employees should not be overlooked. Individual workloads and stress levels look set to rise during the course of the year, placing a greater onus on managers and leaders to communicate regularly and check that workloads do not become unmanageable.”

Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit


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