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Return on Prevention (ROP)- The impact of Business Travel Risk Management to your Bottom Line​

Maximizing profitability while minimizing risk - that's the ultimate goal for any company. Investing in Travel Risk Management is a smart move for achieving just that, as the Return on Prevention (ROP) is undeniable.

Lets start with a few facts:

  • Medical expenses associated with travel-related illnesses cost businesses over USD 7 billion annually, according to a study by the US Centers for Disease Control (CDC)

  • Business travelers are three times more likely to be killed in a road traffic accident than the general population, according to the US National Safety Council.

In a recent post, I discussed the cost of mental health issues in employees for businesses. I received a range of comments from the audience, from "mental health is private and not to be dealt with by employers" to - real concerns reflecting urgency at corporate and macroeconomic level.

How can a "Return of Prevention" calculation help?

When discussing Travel Risk Management with employers, travel insurances, IPMI or expatriate / mobility managers, I am often asked to quantify the value of Travel Risk Management!

After all, my counterparts must internally sell every spend to their boards, who are often driven by pure numbers.

Unfortunately, there is little literature that directly reviews the dollar impact of Travel Risk Management measures. However, studies on Occupational Health, Medicine in general, Road Safety, and others can help, as we'll see below.

A ROP calculation compares the cost of implementing a Travel Risk Management program and its specific measures to the cost of an incident occurring, such as the cost of emergency medical treatment, evacuation, or lost productivity.

What is "Return on Prevention" (ROP)?

Prevention is a key element in any Travel Risk Management setup, alongside with "Intervention," "Information," and "Control."

ROI assumes that preventative measures are measurable and lead to a return for the company. ROP refers to the cost savings and benefits that can be gained by implementing preventive measures to reduce the likelihood of negative events occurring during business travel.

Such measures may include employee training, security assessments, and emergency response planning. On the medical side, potential measures include vaccination programs, health checkups, and simple things, such as providing employees with hand sanitizers, face masks, or other hygienic utilities.

By taking these steps, companies reduce the Risk and therefore potential costs associated with incidents such as medical emergencies, security breaches, and natural disasters.

Additionally, preventive measures can improve employee safety and morale, leading to increased productivity and reduced turnover.

Return vs. Cost?

Before looking at the Return, let's investigate further the "Cost" element of incidents and risks. Ultimately, costs are always a good starting point in discussions with your CFO!

  • Workplace stress results in more than USD 300 billion in healthcare costs annually in the US (American Institute of Stress)

  • Every 12 seconds a worker dies from a work-related accident or disease (International Labour Organization - ILO)

  • In 2019, road accidents caused an estimated 38 million deaths and injuries worldwide, costing the global economy USD 1.8 trillion (World Health Organization - WHO)

  • The cost of natural disasters in the past decade exceeded USD 1.5 trillion, with a significant proportion of these costs incurred by businesses (United Nations Office for Disaster Risk Reduction - UNDRR)

Now that we understand the costs of doing nothing, let's look at the documented examples on the return that medical, occupational, and security measures may bring:

  • Hand hygiene: Implementing hand hygiene programs in healthcare settings can reduce the spread of infections by up to 40%. This can be as simple as providing employees with hand sanitizer and training them on proper hand hygiene techniques (CDC)

  • Ergonomics: Ergonomic interventions, such as adjusting workstations and providing employees with ergonomic equipment, can reduce the risk of musculoskeletal disorders (MSDs) by up to 50% (National Institute for Occupational Safety and Health - NIOSH

  • Respiratory protection: A study found that providing employees with respiratory protection equipment, such as masks or respirators, can reduce the risk of respiratory diseases

An ROP calculation should be a key component of any Travel Risk Management program. By understanding cost impact and benefits, companies will make informed decisions about where to invest their resources in order to protect their employees and their bottom line.

By highlighting the financial benefits of a Travel Risk Management program, businesses can more effectively communicate its value to upper management and gain the support needed to implement it.

The value of Business Travel in the Covid-19 aftermath

Business travel is a significant investment for most companies, with the average company spending $1,428 per employee on business travel in 2019. Studies have shown that organsations that invest in business travel tend to have higher revenues and growth. However, the COVID-19 pandemic has led to changes in the way companies approach business travel, with an increase in telework and the use of remote meeting technology.

Travel Risk Management, and therfore a Return on Prevention (ROP) calculation of the same is likely of higher important for companies with a high number of employees traveling.

The ROP calculation helps identify areas where preventative measures should be focused, and it can also help justify related cost to the organisations leadership.

Companies can now determine the cost-effectiveness of their travel risk management program and make decisions about where to allocate resources. It is important to include aspects such as loss of productivity, reputational costs and similar factors not visible in the immediate.


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