In the world of hospitality, one big question that stirs in the minds of decision-makers is: How does one genuinely measure the ROI of staff training and compliance? Unravelling this mystery is somewhat akin to cooking a good textured souffle, complex, but not impossible.
So, in this article, we’ll show you ways you can check up on what’s working and how to implement a ROI formula yourself.
Firstly, let’s take a moment to reflect on the all-important customer experience. According to a report by PWC (2017), a whopping 73% of all consumers regard customer experience as a significant factor influencing their purchasing decisions . In the world of hospitality, high-quality customer service is the beating heart of the business, and this service quality is irrevocably tied to your level of staff training.
So, where’s the ROI in this? It’s apparent in the broad smiles, heartfelt thanks, and the ever-important online reviews your satisfied customers leave. These tangible indicators serve as your first line of evidence, speaking volumes about the effectiveness of your training program.
Can you measure this? Yes, you can look at review sentiments and check whether certain team members are mentioned more often or less often compared to before you implemented new training systems. It’s hard to be scientific about this, but the earlier you start quantifying customer experience, the better long-term data you’ll end up with to check on your ROI of a training system.
However, ROI isn’t just about the soft, often intangible aspect of customer satisfaction. It’s also found in something more grounded, more regimented - compliance. This silent factor is often overlooked, but its impact is resounding. According to a Food Standards Agency report (2018), 84% of UK consumers give due weightage to the food hygiene rating of an establishment when deciding their dining location . Therefore, non-compliance can directly chip away at your business, taking away sizeable chunks out of your profits.
What’s more is proper compliance averts business-ending lawsuits and horrific press reviews if fires, food poisoning, or other disasters do strike your premises. This bit isn’t measurable until it occurs, but if it can happen to hundreds of hospitality businesses a year, it can also happen to you.
Staff retention is another piece of this complex puzzle. Extensive research by the Chartered Management Institute (2020) revealed that businesses offering comprehensive training programmes witness a staff turnover rate that is 27% lower than those who don’t . So, while the idea of training and compliance might initially feel like an expense, consider the financial (and logistical) implications of continually replacing staff. The benefit of investing in training then becomes glaringly obvious.
This one is easy to measure. Simply constantly keep staff turnover as a monthly KPI. After you’ve implemented your training systems, just watch how this figure changes.
Mistakes, the unwelcome guests at any business’s table, can be significantly reduced with adequate staff training. The Institute of Hospitality (2020) presented a striking fact: businesses that invest in staff training see a whopping 26% reduction in avoidable errors 
By saving on these direct costs and preventing the potential loss of customer goodwill due to poor service, you further increase the ROI of your training efforts.
Sales, the lifeblood of any business, also see a considerable uptick when staff are well trained. According to the National Restaurant Association (2022), businesses with well-trained staff witness an average 10% increase in sales . When employees are equipped with the right skills and knowledge, they’re far more effective at upselling and getting, leading to a healthy boost in your overall revenues.
Depending on your model, this one can be tricky to measure. You’re just going to have to go with your gut sometimes.
Now, this myriad of indicators might make it seem like calculating ROI is a game of connect-the-dots. But the good news is that there’s a model that helps simplify this process - the Kirkpatrick Model. The Kirkpatrick Model operates on four levels - Reaction, Learning, Behaviour, and Results.
‘Reaction’ involves gauging how the trainees responded to the training program. This can be done through surveys or informal feedback sessions. ‘Learning’ assesses the degree of skill or knowledge enhancement that the training enabled. This can be evaluated through quizzes, role plays, or observations.
The third level, ‘Behaviour’, looks at the change in the trainees’ behaviour once they’re back on the job. Are they using their new skills effectively? Are they making fewer mistakes? And finally, ‘Results’, the most important level, measures the effect on the business. Are sales improving? Are customers happier? Are there fewer compliance issues?
By meticulously collecting data at each of these levels and linking them back to the investment made on training, you can effectively calculate the ROI of your training initiatives.
To put it into a mathematical form:
ROI (%) = (Net Training Benefits / Training Costs) x 100
By defining your Net Training Benefits as the total monetary benefit gained from the training (like increased revenue, cost savings from reduced errors, etc.) minus the cost of the training, you can precisely calculate your ROI.
The next time you find yourself pondering about the ROI of staff training and compliance, remember these indicators. Yes, it might require a bit of juggling with data and numbers, but it is not just possible, but essential. It does take effort, and you aren’t likely able to see any trend until after a large chunk of time.
But as business leaders, making informed decisions based on tangible evidence is the name of the game. So, no matter how hard it is, you need to try.
If you’re interested in trying a learning system for your staff, find out more about our simple-to-use LMS here.
References:  PWC. (2017). Future of Customer Experience Survey.  Food Standards Agency. (2018). Food and You Survey.  Chartered Management Institute. (2020). Management 2020: Leadership to Unlock Long-term Growth.  Institute of Hospitality. (2020). The Importance of Training in Hospitality.  National Restaurant Association. (2022). State of the Restaurant Industry Report.  Kirkpatrick, D.L. (1994). Evaluating Training Programs: The Four Levels. Berrett-Koehler Publishers.
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