Can TMC Brainpower Still Save Money?

When I was at the sharp end of the travel management company business, I was a huge fan of employing clever people and, when possible, rewarding them for success in saving money for both my clients and my company. I undertook quite a bit of research which confirmed to me that a good agent could bring an annual savings ROI of between 300 percent and 500 percent. Only trouble was that people were so focussed on taking any manpower cost out that they did not delve into the deeper implications of doing so.

Probably nothing much has changed in the last couple of years except that most of these clever folk have moved on to another industry. Headcount has given way to self book and people being employed are more likely to be for the lower skilled fulfilment side of these computer transactions. All cost is rightly under the microscope but is any allowance given to the need for savvy people who can look both inside and outside the box for service and savings opportunities?

As we all know, a booking computer is only as good as what is put inside it. It is also reasonably single focussed and can also be hoodwinked quite successfully when it comes to travel. Who is policing the content it stores? Who is fine tuning it? How often is it audited? Who is recognising the broader trends? This will become even more important soon as TMCs develop and refine their own yield and price capabilities.

I fear for a TMC industry that seems to be losing its own front line brains for the sake of saving a quick buck or two. Maybe someone will look at the same ROI figures that I did in the past and realise that employing smart people with the right incentives is an investment in saving money not just an unwelcome cost.

In some parts of the world there are big shortages of experienced staff as the market recovers. The UK is a good example where TMC stripped their staffing levels to the bone during the recession and now cannot get them back as demand rises. It is essential a way is found to maintain a core of bright ambitious people without having to chop them whenever the market varies. Corporates also need to think about this the next time they scream at their TMC to lower head count. They do not simply pop back when wanted any more.
This post was republished with permission from the blog of former managing director of HRG UK Mike Platt.