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Pay For Consultant Travel Time?

We are looking at a consultant to help with a large project that could run many years. They: - Live about an hours plane flight away. - Usually flies in and out the same day. - Could stay overnight sometimes depending on times of meetings ending. - Paying them by the hour. - work for a company that has locations in our city and their city. - We could find someone else but that would take quite a bit of time which we don't have. :( - A daily rate for travel days might make sense? (but need to make sure they are working on our project the whole time they are here). They have asked that we include a clause that pays them for travel time. We haven't discussed what times are included in "travel time". Starting at stepping out the front door vs time in the air / airport. Your thoughts on paying for travel time, your policies and possible considerations? I can see many ways to view this. One could argue that travel time could be considered commute time. Thank you.

Answers

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

I am generally opposed to paying for travel time. Travel is part of the job and adds nothing to productivity, generally. I would ask them for their argument as to why they should be paid. So ask them why and how much they think it is worth. I certainly wouldn't pay them full boat for travel time. Of course if they can work during the commute, that is another issue all together.

Bottom line, have them justify why and how much.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I charge 1/2 trip for travel if under 8 hours. Caveat I would have a min of 8 hrs if I made the trip.

If this is a long term gig, for an hour trip I probably wouldn't charge for travel period, especially given the option that I can stay over.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I just notice I left out that I didn't charge for travel that took less than 90 mins, without traffic (that's a large swath of territory of the NY metro area)

Bob Low
Title: Principal
Company: Perron & Low
(Principal, Perron & Low) |

I generally don't charge for travel. The exception is if travel has to be during the day and uses time that otherwise would have been billable. Some scenarios: if travel is only 1-2 hours, treat like a commute (non-billable). If travel can be the night before and return in the evening, non-billable. If the consultant bills by the day and has to travel in and out the same day, allow them to bill for a full day (8 hours). If travel consumes an entire morning or afternoon that otherwise could be billable, allow travel to be billed but at a reduced rate i.e. half. Compromise between time lost by the consultant but no value received by the company.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Anon

You post seems to hint at a regular schedule of one day visits over many years. I like Rob's approach-it simplifies the admin. I would try to define visits as half day or full day (driven by what the visit agenda is) for professional fees. Then for travel time, pay two hours for travel time at 50% rate, plus actual cost of travel (air, parking...).On rare occasions where overnight stay is required, pay hotel too.

Overall, what is the value that this consultant is expected to deliver to you? Make sure s/he and you stay focused on that.

And finally, seeing as you pay the expenses, set the guidelines that are fair: e.g avoid last minute ticket purchases, fly coach class.

Topic Expert
Paul Benedetto
Title: CFO, Director of Finance, Consultant
Company: Nextwave Software, Rethink Fabrics
(CFO, Director of Finance, Consultant, Nextwave Software, Rethink Fabrics) |

From my standpoint, the answer depends on the type of work this individual is doing. If this consultant is required to be onsite to perform physical duties (e.g. running machinery, directing and monitoring staff subordinate to them, etc.), then I would say no pay for travel time – the job is in one spot and it is their choice where they choose to live, and how they commute. I would also then argue as to whether this was a contractor vs. employee role…

On the other hand, if this person can perform their duties both onsite and remote, as it typically involves more management consulting aspects, then I feel the conversation about travel time is warranted. Coming out for regular visits in order to meet with folks, observe and train, etc. then becomes an added benefit/facilitator to the engagement. You’ve stated that this person is a qualified individual and you would prefer them over other options for this project. However, there is an opportunity cost to the individual in taking this extra time to travel to and from your site, where he could be working those hours on some other endeavor.

The above being said, when I need to travel to a client I typically charge a “day rate” of 8 to 10 hours, at least on the front and back end portions of a trip. More times than not, in these situations you work later days with the client, rolling into evenings for a couple dinners and certainly then back at the hotel room – all in an effort to make the trip as efficient and productive as possible… Should you then charge 14 hour days on every one when you are operating this way? My personal answer is no. I set an expected framework and then charge a flat number of hours. If I end up eating a few hours here and there in order to properly service a client, that is ok in the overall scheme of things, if this is a good client relationship.

Have the contractor come up with a proposal first, then evaluate/modify a bit as warranted. You’ll see where their head is at in the process and figure out where you are willing to ultimately land on rate/structure.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Is it just me? Not knowing what the type of consulting job it is and the question of paying for travel time aside, "to help with a large project that could run many years." and paying by the hour seems a bit too much. A multi-year charged by the hour contract with travel time (and assuming with reimburseable expenses) is a gravy train for the would be consultant/s. Wanna hire me?? LOL (just kidding)

Then this comment...."We could find someone else but that would take quite a bit of time which we don't have".... and the job could run many years! Can't you just get the Consultants to start the work with the intention of finding someone who can give you a better deal going forward?

Ross Anderson, CPA, MBA
Title: Controller
Company: TFS Capital
(Controller, TFS Capital) |

We did not pay a consultant travel time, but rather we gave them a monthly fee and reimbursed for travel expenses. Travel was part of their agreement. An hour flight is much longer than an hour given the time to the airport, waiting to get on the plan and liftoff, and the time from airport to the site. I would try to hammer out an agreement factoring in their needs and yours and including flexibility, such as the flexibility for when they do travel, they can work 10-15 hour days and fly back early/limit the number of trips. If you have to pay them for travel time, see if you can get an agreed amount to account for their travel time and not just an hourly fee.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Travel time, whether to pay or not, is part of the negotiation. Whether you pay me directly or indirectly; it will be part of my bill. Sometimes obfuscation is a wonderful thing.

Travel fees are easier to agree upon, such as "we only pay coach", "we will pay the airfare on the day or day +1 of the PO", etc.

I had a client that was notorious for telling me last minute to fly out. Air fare was always absurdly expensive.

Anonymous
(Accountant / Bookkeeper) |

I recently travelled from Houston to Midland. The flight left at 6:30 am, so left the house at 4:30 am and spent one hour to get to the airport, park and be at the boarding area at 5:30 It was a one hour drive, each direction from the airport in Midland to the facility. Landed at 9:00 the same night and had a 45 minute drive to home. Time spent at the site - just under 8 hours. Billable time - 8 hours.

First point - a one hour flight is not a one hour commute. Second point, the day began at 5:30 am and ended at 9:00 pm and I will not accept a similar project in the future.

If a meeting requiring physical presence is scheduled for a half day - a full day of potential billable time is lost. Four hours of billable time is not reasonable in my opinion. Time spent in airports and on planes is not as productive as time in an office and does not compensate adequately.

I agree with other comments that the terms of the project should be negotiated up front. The negotiated agreement should include win-win results or the result will likely be lose-lose.

Anonymous
(President and CEO MobileAccountantAZ) |

Early on in starting my business I didn't charge for travel time since I meet with all new clients once for the initial consult, retainer, engagement letter and setting up the remote host program on their PC is applicable. I had a client that was a half hour drive easy each way that simply refused to allow me to use remote hosting until we got to know each other better and she agreed to do so after the 3 month mark. The work onsite actually took less than a half hour so that meant an hour and a half out of my day plus getting getting ready to go, ie: dressed, took another half hour at least. The month end that I showed up and she said oh everything is done I just need you too fill out the sales tax forms (10 minutes of work) was the month I came home immediately and sent out an email to all clients stating there was a trip charge plus a 2 hour minimum for all work onsite. I have a few clients that would mean 3 hours just in the commute and that eats up my entire day that I could be using that time getting caught up on other clients.

Mike Haile
Title: Founder
Company: Haile Consulting Solutions
(Founder, Haile Consulting Solutions) |

I have rarely worked in a situation where it was charged at all and I don't recall it being charged at full rate. That said this is a typical business negotiation so depends on the relative negotiation positions of the business and the contractor.

If the consultant has a rare skill that is vital to the project then they are likely to charge a higher rate and or travel time. If the resource is easily replaceable then probably not.

Overall I agree with Emerson's comments

- An hourly rate for a consultant to work on a multi year project with travel time seems like poor negotiation on the part of the company.

- Multi year projects in which you don't have time to replace one resource seems like an odd project to me so you might want to look at the business case, risks, issues etc in more detail. What, for example, would be the impact on the project if your consultant is "run over by a bus"?

Final point - I agree with the anonymous accountant/bookkeeper. A 1 hour flight is usually in fact a 2 - 3 hour commute.

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