Have you calculated the ROI of executive drivers? Hiring a professional driver is often considered a luxury reserved only for the upper echelons of major corporations. However, when seen from a business perspective and through the lens of risk management, using well-trained drivers to help executives with ground transportation can often provide very good return on investment.
While practices vary from country to country, hiring a professional driver is often considered a luxury reserved only for royalty, top politicians and the upper echelons of major corporations. But have you ever really calculated the ROI of executive drivers? When seen from a business point of view, using well-trained drivers to help executives with ground transportation can be a very good investment indeed. That this is the case for executive travel both at home as well as far-off places may come as a surprise to some. But if you apply basic risk management principles, the case for executive drivers starts to look a bit different. Here’s the simplest risk calculation formula possible: a risk is equal to its impact times the probability of its occurrence. Let’s put it to work in this blog, where we examine the factors a corporate travel or security department should consider before hiring a driver or a rental car for top executives.
Consider the severity of the risk’s impact
Sorry to start with a subject that is no one’s favorite, but let’s face facts: the death or serious injury of a top executive is not only a tragedy for the individual and his or her family. It is also something that can negatively impact a company’s share price, financial results and entire future. Unfortunately, there are plenty of examples of the negative effects of the sudden loss of a founder or senior management team member. Enough said about the first half of the risk index formula. Let’s move on to the other half.
Consider the probability of risk
You hear it every time an airplane crashes and people get nervous about travelling by plane. Air travel is much safer than travel by car. Ten times safer, 22 times safer, “far more safe”, etc. The numbers vary depending on how you calculate it, but no one who looks at the statistics is in doubt. And no one can be in doubt about the reverse: travel by car is far less safe than travel by air. And we do it far more often. In most countries, road accidents account for a depressingly significant share of deaths each year and consistently rank as the top cause of accidental death. For people who live in developed countries, the time they spend in their cars is the time of highest risk during their day. For people who live in developing countries, the outlook is worse. In the US more than 33,000 people died in road accidents in 2012, the last year for which we have complete stats. Two thirds of the deceased were travelling in passenger vehicles (cars) rather than trucks or motorcycles. And guess what 72% of those killed in a car crashes were doing at the time of the crash? Driving. Don’t get me wrong. I’m not suggesting that everyone stops driving or that CEOs should never be allowed behind the wheel. I’m just pointing out that the probability of a high-impact risk is greater when he or she does. Travel by car increases other risks from an executive protection point of view. As Gavin DeBecker, Tom Taylor and Jeff Marquart point out in their great book, Just Two Seconds, security risks are greater when the intended target is traveling by a ground vehicle than at any other time. In their impressive survey of more than 1,000 incidents worldwide, they found that a full 43% of all events intended to “embarrass, harass or cause harm” occurred when the target was in a vehicle. Similarly, a worldwide survey by IntelCenter shows that 34% of all kidnappings so far in 2014 took place when the intended target was driving his or her car. See more here: http://goo.gl/rv7rqW
Productivity: would you rather have them drive the car – or company results?
We won’t get into the math, but we will point out that the average hourly compensation for top corporate executives is, er, far higher than that of a top-trained and vetted executive driver. Believe us – we also read the papers and we hire hundreds of drivers in locations around the world every year from Switzerland to Swaziland. When a senior management team member spends an hour or more behind the wheel per day, that’s time he or she could be spending doing something that adds more value for the company. Whether abroad or at home, being able to concentrate on work rather than traffic can be the single most effective productivity boost available for many executives. A phone and a laptop are all it takes as long as the exec is in the backseat rather than in the front. So, have we convinced you to take a closer look at the ROI of hiring an executive driver? If yes, then please check out our next blog on the four questions you need to ask before hiring a executive driver.