MEASURING RESULTS ON YOUR INVESTMENT IN STAFF TRAINING
By The Canadian Tourism Human Resource Council
Friday, February 6, 2009
While high turnover has long been a dilemma for food service operators, the added burden of a shrinking labour pool has everyone looking for new ways to attract and retain qualified staff.
When it comes to staff retention, productivity and satisfaction, no other activity is more beneficial – or more misunderstood – than training. In the food service industry, where profit margins are tight, employers look at training with the same bottom line mentality they use for other areas of their business.
Canada has long been singled out amongst the G8 countries as having a rather lacklustre approach to training and skills development.
According to Statistics Canada, “More than half of the differences in economic growth between
OECD (Organization for Economic Cooperation and Development) countries can be explained by differences in the average skill level between countries.”
Statistics Canada also noted, “Investment in human capital, that is, in education and skills training, is three times as important to economic growth as investment in physical capital, such as machinery and equipment.”
While these statements address the overall economy, the reality is tourism and, more specifically, the food and beverage industry has traditionally invested even less in its human capacity.
With the available labour pool at an all time low in many regions of the country, employers are beginning to view training as a viable undertaking to remain competitive in the struggle to retain staff. That said, employers are still seeking ways to prove training is worth the investment. The best way to demonstrate the value of training to an organization is to conduct a Return on Training Investment (ROTI) analysis.
WHAT IS A ROTI ANALYSIS?
ROTI addresses the question, “For every dollar invested in training, how much does the investor get back?”
The most common form of ROTI is a cost-benefit analysis. While cost-benefit is an integral component of all ROTI tools, not all training can demonstrate ROTI but it is still important to the success of the business.
The first question often posed by employers is, “What are the real benefits of conducting a ROTI analysis?”
For employers, the results can be used to assist them in making decisions on different training options. The analysis can also assist in comparing the cost of training and retaining existing employees to recruiting new ones as well as looking at the value of training compared to other investments, such as purchasing new equipment or renovations.
In general terms, a ROTI analysis can simply demonstrate training is an investment and accountability for training costs. For employers, the analysis can demonstrate how to use training time and money efficiently or highlight a particular training need.
WHY TRACK ROTI?
With any business investment, there needs to be a rationale and outcome for the costs incurred. Tracking the success of a new grill or deep fryer is fairly easy.
Measuring the success of training against your bottom line is just as important but is not nearly as straightforward to demonstrate. It is imperative you have an intimate understanding of the issue you want to address with the training conducted. Are you looking at measuring increased productivity, fewer mistakes, better quality or a combination of measures?
You need to choose the type of training program to adopt. For example, will it be trainer-led, self-study or on the job training?
You also need to decide what data to collect and how to collect it. Data collected will only be useful if the measurement tools used are of a high quality and they can provide information that is reliable and valid. For instance, are you able to separate the individual measurements in a meaningful manner?
Additional considerations include: whether to use a control group (not engaged in training) to measure against over the reporting period; whether to access financial and logistical resources to conduct the ROTI analysis; and whether you can successfully get your entire staff on board for the study period.
All of the reasoning behind conducting a ROTI analysis is meaningless unless the data analysis is based on a level of disaggregated data that is useful and the results of the analysis are meaningful and actionable by the decision makers. Herein lies the biggest obstacle for most employers. More often than not, companies are missing the data that can be used as a benchmark from which to start. When undertaking any type of ROTI study, employers need to be sure they have the appropriate systems in place to ensure the analysis can be applied to a number of activities as well as the aggregate data.
In 2006, the
Canadian Tourism Human Resource Council developed and tested a ROTI tool for food and beverage servers. The ROTI tool captured an exhaustive list of measures, the core being customer satisfaction, sales, staff turnover, position knowledge/application and product knowledge.
Customer satisfaction stands head and shoulders above all other measures due to the perception that it is a major driver of revenues and profits; from customer satisfaction comes more visits, increased sales and improved productivity.
Sales is the single measure that drives all calculations of profits, returns on investment and any other ratios one might use to estimate the worth and benefits from a restaurant. Sales are closely associated with the “upselling” subcategory that is also measured. To perform a detailed analysis on the ROTI to sales, the availability of disaggregated data (by server) is necessary.
Staff turnover is a key challenge to all operators in the food and beverage industry. Any measure that can reduce staff turnover (as it is costly to recruit, hire and train new employees) will add directly to the organization’s profitability. Staff turnover provides an indication of other key factors, including attitude, job satisfaction, morale and even teamwork.
Both product knowledge and position knowledge deal with the knowledge and behaviour of a food and beverage server. Position knowledge/application deals more with the policies, procedures and operations within a restaurant while product knowledge relates more to the understanding of the menu, ingredients in dishes and how these relate to the wine list.
The five remaining measures observed in the CTHRC ROTI model are of lesser importance and reflected in some way within the top five. These include attitude, morale, teamwork, upselling and efficiency/consistency.
The results of the CTHRC pilot ROTI tool have been generally positive. Users viewed it as a learning resource, sensitizing people to things they might not otherwise be thinking of. The experience with the pilot tool has three potential and overlapping uses: measuring the benefits of training undertaken, estimating the future benefits of training and promoting training.
The CTHRC is interested in working with any food service operator interested in further piloting the ROTI tool for food and beverage servers. With further piloting, the council hopes to offer a free, relatively generic tool that business operators can adopt as part of their core business objectives. To learn more about this resource, please contact Alison Govier at agovier@cthrc.ca.
