Many large companies allocate travel and subsistence allowances to employees, expecting them to manage their accommodation while working independently. While this approach provides flexibility, it often falls short regarding cost efficiency, employee well-being, and overall organisational effectiveness. In reality, per-diem payments create more challenges than solutions, highlighting the need for a centrally managed accommodation strategy.

The Pitfalls of Per-Diem Payments

1. Cost Inefficiencies
At first glance, per-diem allowances appear cost-effective, giving employees autonomy over travel expenses. However, this fragmented approach often leads to increased overall spending. Without corporate oversight, employees may pay premium rates for last-minute bookings, rely on expensive short-term stays, or choose budget options that lack essential amenities.

Additionally, companies miss out on the benefits of bulk booking and negotiated corporate rates that come with a centralised accommodation strategy. By leveraging long-term agreements with accommodation providers, businesses can significantly reduce expenditure while ensuring quality stays for their workforce.

2. Subpar Living Conditions
When employees are left to book their accommodation within a fixed per-diem budget, they often prioritise cost savings over comfort. This can lead to:

• Poorly maintained or unsuitable living spaces
• Lack of essential facilities such as kitchens, laundry, and WiFi
• Safety concerns, particularly in unfamiliar locations

Inadequate accommodation can negatively impact the well-being, morale, and productivity of employees away from home for extended periods. A substandard living environment contributes to fatigue, stress, and overall job dissatisfaction.

3. Increased Employee Stress
Managing accommodation places unnecessary stress on employees. Searching for available, affordable, and safe housing – often in unfamiliar locations – adds to their workload, detracting from their ability to focus on their jobs. Furthermore, administrative burdens such as submitting receipts and expense claims can be time-consuming and frustrating.

A centralised accommodation approach eliminates these concerns by ensuring employees are placed in high-quality, pre-arranged housing, allowing them to focus on their work rather than logistical challenges.

The Case for Centrally Managed Accommodation

A more structured approach to workforce accommodation benefits both companies and employees. By shifting away from individual per-diem allowances, businesses can:
? Ensure Quality and Consistency – Employees are provided with safe, comfortable, and well-equipped accommodations that meet company standards.
? Reduce Costs – Bulk booking agreements and long-term provider partnerships help lower accommodation expenses.
? Enhance Employee Well-Being – A stress-free, comfortable stay improves overall job satisfaction, performance, and retention.
? Streamline Administration – Centralising accommodation management eliminates the need for excessive expense claims and approvals.

Conclusion

While per-diem allowances may offer flexibility, they fail to address the real needs of employees working away from home. Investing in a well-managed accommodation strategy saves costs and ensures workforce well-being, productivity, and long-term retention. By prioritising structured accommodation solutions, companies can align their travel policies with their broader employee well-being initiatives, ultimately creating a more supportive and effective work environment.

Finally, ask yourself this—does your per diem accommodation spend align with your ESG goals? Probably not.

Why It Matters:

• Environmental (E) – Are you reducing carbon emissions, choosing energy-efficient accommodations, and minimising waste?
• Social (S) – Does your workforce housing support employee well-being, fair labour practices, and community engagement?
• Governance (G) – Are your accommodation choices ethical, transparent, and aligned with responsible business practices?

Workforce accommodation isn’t just about cost – it’s an opportunity to make smarter, more sustainable choices that support your ESG commitments.