01 Dec It’s cheaper to grow your own

It’s difficult to find well-trained managers, chefs, and supervisors yet they’re needed in greater numbers as the hospitality industry becomes more competitive and profit margins shrink. Several operators report that they have no choice but to accept lower performance standards from their key staff because they can’t afford a protracted vacancy in their team.

Since the pandemic, most Australian hospitality operators I talk to accept that if management skills are needed, they can no longer be brought in by simply posting a recruitment ad or poaching an experienced manager from another business.

However, very few hospitality companies devote more than a token percentage of their annual turnover to staff training and development. If they spent a small percentage of their turnover on training, the problem could be avoided.

So, why are so many business owners afraid to spend the money on developing their staff?

It could be because they’ve tried it in the past and found that it didn’t achieve a result — they see it as an expense and not an investment. There are only a few training providers who can deliver high quality leadership training, contextualised for hospitality in Australia. If you can find someone good, it may seem expensive.

Another likely reason for the hesitation is that in many cases, staff who have received leadership development have left their job before the business owners got to see a return on the investment. Trying to train your staff while you have high staff turnover is a terrible waste of money.

The staff turnover cycle must be stopped!

Staff stability requires good management, and good management requires training. The staff retention target we recommend for our clients is two years. That is, on average, employees should stay in the company for two years or longer. We find that when staff who are motivated to develop new skills are given the opportunity to do so through effective training, they tend to stay longer because they are challenged and stimulated to the point where their development needs are met. The greatest benefit for business owners is that the next generation of team leaders and managers can be grown from within the existing team, so they rarely have to look externally to fill senior positions.

An appropriate budget for key staff training is 1.5 – 2% of revenue.

When that budget is invested wisely, it results in tighter control of key costs and higher profits follow. If the thought of coming up with that sort of training budget scares you, think of it this way — If your managers receive training that makes them five percent more effective, what would that be worth to your business? You will make money on the deal.

If you’re worried about the cost of training key staff and having them leave, consider the cost of not training them and having them stay.

Effective training is a sound investment, not a cost.

If you want to learn more about cost effective, quality management training, get in touch.