The best investment you'll ever make in your hospitality or foodservice business is in your staff. As a steel company executive was known to say, "Our product is steel, but our investment is people." And investing in people is just good business, with returns that far outweigh the cost of training and upgrading skills.
"You'd better invest in your people or you'll be left behind in your battle for good staff," says Peter Shrive of Cambridge Management Planning, a recruiter working in the hospitality industry. "If you want competent people to keep their edge, you have to keep reinforcing it through training. In our civilization, nothing stays the same. Of the Top 50 companies 10 years ago, only two or three of them are still there." He also notes that effective people need to grow and develop, otherwise they'll leave you... either physically or mentally. "You would be wise to follow the Japanese principle of kaizen - always be improving."
Why should employers upgrade staff skills?
There are powerful business reasons to create a training culture in your hospitality or foodservice business:
According to Susan Anderson-Khlief, senior vice president of recruitment and retention at the National Restaurant Association Educational Foundation, it costs $23,000 on average to replace a manager, and hourly turnover costs $2,300 per employee in the restaurant industry.
"This is why, especially in the past couple years, we've seen a noticeable interest and investment in employee development."
The numbers tell the story
Monical's Pizza, a privately held chain of 58 restaurants in the US Midwest, was the pioneering adopter of the National Restaurant Association Education Foundation's (NRAEF) Harvard ManageMentorPLUS program. The challenge for Monical's was to ensure their managers had the skills they needed to maximize the profitability of each unit and to retain their best qualified managers.
As a result of the investment in skills upgrading, Monical's saw a reduction in employee turnover rate (83% in 2004 versus 108% in 2002), low manager turnover (10% in 2004), and a 15.5% increase in employee satisfaction scores and a 12.7% increase in overall guest satisfaction scores. This resulted in an overall revenue growth of 16.7% (2004 versus 2000) and an overall profit of 30.2%.
These results are typical of hospitality and foodservice companies that invest in skills upgrading using a comprehensive, ongoing approach.
What kind of training will work for my business?
The best training combines off-site, in-house and online skills improvement. Many companies sponsor their staff training, tailor courses to employees' work schedules, and offer their workers opportunities to take time off to attend university.
A company like Choice Hotels, for instance, which prides itself on being a training organization, taps into the best resources available and pays for staff training. Says Pat Murphy, vice president organizational development, diversity and learning, "We will send our best executives to Wharton or MIT. We send our high tech people to the best classes. We also bring in classes and offer them internally, and we work with local vendors for specific training."
Everyone at the company is considered for skills enhancement. "When you upgrade your employees' skills, you upgrade your company," she adds. "Now your company is capable of doing more. Having those more talented assets as part of your company will help you grow and put you in a position to advance. We offered a training program where we sent people across the country, across disciplines - almost without exception, everyone has been promoted since then. It's far cheaper for me to promote an employee than have to recruit an employee."
Tipsheet for employers
Source: Peter Shrive, recruiter, partner with Cambridge Management Planning