By Holly Zoba, Senior Vice President, Hospitality Sales, Signature Worldwide
How do you measure the ROI of training? Is it through an increase in sales? A decrease in employee turnover? Better delivery of customer service?
In some ways, measuring the ROI of training is not unlike answering the question, “What is the ROI of putting on your shirt?” It doesn’t seem like there is a lot of value, until one day you don’t do it and you show up at work shirtless. Unless you are a professional surfer, you probably will regret it.
When sales go south, generally the first thing cut is advertising; the second thing always seems to be training. In both of these instances, the people making the decisions don’t see a return on their investment. Unless advertising is somehow coded, it is difficult to measure exactly how many sales an awareness campaign can bring in. The same is true for training. There is fire and life safety training that, of course, must be continued, but what about the soft skills such as customer service and sales? If you cut training in those areas, what are the short-term repercussions? Will you lose sales? Lose customers? You probably won’t see the effects right away.
If you were a contrarian, you would say when budgets get tighter and customers become fewer, you want to ramp up customer service because you want to retain every customer who walks through your door. As a training company, we would agree. But after cutting advertising and training, most businesses go on to the next cut: payroll. They are downsizing the number of employees, cutting benefits, and possibly even reducing salaries. Now, not only are we not training the staff, we are asking fewer people to do more work with less reward.
However, many agree that in the last year or two, employees are simply happy to have a job. And necessity really is the mother of all invention, so, no doubt, new and innovative systems have been created to streamline every process, making getting by with less seen as the efficient route. Efficiency is now king—do anything faster, better, and with fewer people. OK, maybe not better, but as good or at least good enough; definitely faster and with fewer people.
Ultimately, you end up where we are now, with a service industry full of efficient, overworked, underpaid employees who haven’t had training in two years. The companies that recognize this and start to make gains during this time of poor service opportunities will win, and win big. The great companies will right-size their staff, bring training back, and elevate the level of service back to where it used to be or maybe even higher. And then the next recession comes and the entire cycle starts all over again.
Challenges Are Many
Recognizing the ROI of training is a challenge. Until some real numbers can be attached to the cost of untrained employees, the cycle discussed above will go on and on. My company trains many hotel reservations and front desk staffs for hotels. We know training results in a sales increase—higher conversions, higher average rates—as well as a decrease in employee turnover, but even we don’t always have concrete ROI to share. In some cases, there was no baseline measurement, generally in the case of employee retention. Other times, the revenue increase is attributed in part to the overall uplift in the market, a recent renovation, or a new general manager.
We have felt for many years that it was our job to measure the results of our training by mystery shopping employee behavior. We track it diligently—we can show you where your staff began and how they have improved each month through our telephone mystery shopping and online scorecards. We always have been able to show improvement, but how exactly does our process contribute to an increase in sales or customer service?
There are more challenges than the few listed above when trying to measure results of training. For example, if a company pays the least amount of all the employers in the area, has no leadership, and treats its employees poorly, it isn’t likely that any kind of training will have a long-term impact. Not until some fundamental improvements take place.
But in an ideal world, what if we could pick a company, look at every measurement that training personnel might possibly impact—payroll expenses, sick time, turnover, market share, units sold, online reviews and rankings, customer survey scores, and so on—then train that staff from hello to goodbye. After three months, six months, 12 months, etc., of coaching and reinforcement to ensure the employees continue to use their new skills, compare all the measurements. Would that not be the perfect solution to the training ROI quandary? Would this not show the impact of training?
$50,000 of Free Training
At Signature Worldwide, we have been watching these cycles of service go up and down for 25 years. Finally, on our 25th anniversary, we decided to get to the bottom of it. We are selecting one hotel and giving away $50,000 of free training. We will measure every metric prior to the training. We will train across all departments in customer service, sales, leadership, social media, and more. And, finally, we will measure after 30 days, 90 days, six months, and a year.
Why are we giving this away? We occasionally have clients who call us and are willing to spend “whatever it takes” to train their staff, but more often than not, we have clients who want us to train 1,200 employees in two sessions and really make a difference. And those two sessions are only 30 minutes long. We have found this approach rarely proves to be effective. Training is only part of the solution—if you want training to change employee behaviors, there has to be measurement and follow-up.
Does someone need to spend $50,000 to make training effective? Generally no, but we want to see what happens when we do an assessment of a hotel, design hotel-specific training, deliver the training, and put our mystery shopping and measurement in place. Everything we know that works to create a successful program. So we are providing as much time and resources as the winning hotel needs. Then, after the training, we will release our results.
We aren’t looking for the worst hotel. We are looking for the hotel that wants to be the best in the worst way. And we are hoping to finally answer the question, “What exactly is the ROI of training?”
Holly Zoba is senior vice president of sales for the hospitality division of Signature Worldwide, a provider of training solutions for the hospitality industry. Zoba has more than 20 years of sales and marketing management experience in the hospitality industry and is responsible for managing Signature Worldwide’s sales effort by determining best-fit solutions for hoteliers—helping them improve customer service and increase revenue. She can be reached at firstname.lastname@example.org 614.766.5101.