”Our most valuable asset is our people.” I hear this all of the time says meeting facilitation trainer Renie Cavallari. However, it is always followed by, “But we don’t have the money for training” or “We don’t do a lot of training in that area because of our turnover.”
Yikes! Not only do your guests know that you don’t train your people, your message tells your own employees that they’re not worth it and their lack of competency is their problem. Here is what they will be saying to you:
“If you are unwilling to invest in me, as an employee, then you can count on me doing a mediocre job. It is the best I can do with the limited knowledge I have. Odds are if I mess up enough, one of us will decide I should leave.”
Recently, I was at AJ’s Fine Foods, a gourmet grocery store where you can put a down payment on a small car or you can shop for dinner. I have never stepped out of that place with money left in my pocket and less than two bags of groceries!
During my last, and I do mean last, visit to AJ’s, I was told by a new employee that they didn’t know anything about the fish they were weighing out for me, nor how to prepare the stuffed mushrooms I had selected. I felt bad that they did not receive training, as no one wants to be put in a position of feeling incompetent. I also felt bad for AJ’s, as they have all the bad press they need with just this one employee.
If you don’t think this happens in the hospitality business, think again. Last week, I was given a smoking room and told that it was the best the hotel could do. The person on the afternoon shift didn’t pre-block rooms correctly, so I was forced to find a way to enjoy the second hand smoke I proceeded to breathe all night. This was at a four-star hotel, folks!
For those of you who question the return on training, here are a few facts around investing in, and keeping, your employees dizzy with happiness:
FACT 1: Incompetent employees make for unhappy employees. Unhappy employees are talking to your guests, who are soon to be unhappy guests.
- 96% of your customers do not complain to anyone who can help them
- 90% of your customers with unresolved complaints will never return
- 60% of your customers with resolved complaints will return
- 95% of your customers will return if they feel their complaint was resolved quickly
Source: White House Office of Consumer Affairs – Concerning an unhappy guest
This study reveals that:
- On average, for each customer who was “wronged,” there are approximately 25 others who remained silent.
- On average, each person in this silent majority will, by word of mouth, tell between eight and 16 people – an average of 12 – about their complaint. (Over 10% will tell more than 20 people)
- When you do the math, a potential 300 people can be influenced by just one negative situation. Heck, I am telling the thousands of readers that H&MM touches each day!
- Guest satisfaction has a direct effect on price, value proposition, RevPAR and GOPPAR.
FACT 2: Competent employees feel confident. Confidence creates pride and enthusiasm. Happy employees enjoy their work and guests know it. They also don’t quit!
- Retaining 5% of your business is a huge financial advantage to your business. It can increase the profits from between 25 to 75 percent.
- The cost to replace a manager is estimated at $50,000 in total. Unhappy employees leave and replacing them has a direct impact on profit.
Source: Harvard University Survey & Business Review Research
- Industry turnover rate hovers between 78.3% and 95.4% nationally, on average.
- Overall, higher levels of motivation and motivated performance translate into a 53% reduction in worker turnover.
- It will cost roughly 100% to 200% of a line level employee’s base salary to recruit and train the replacement.
Source: Executive White Paper – SITE Foundation (The importance of caring for the internal customer)
- Costs imposed by dissatisfied customers are perhaps more important. The unsatisfied customer buys less over time, demands more service than a satisfied customer and has the power to dissuade potential customers from doing business with your company.
Source: “The Service Profit Changing: How Leading Companies Link Profit & Growth to Loyalty, Satisfaction, and Value” by James Heskett, W. Earl Sasser, Jr. & Leonard A. Schlesinger
- Research demonstrated that a highly satisfied customer is six times more likely to re-purchase than a customer who is merely satisfied.
- In fact, a six percent change in the proportion of customers who were highly satisfied was associated with a five percent change in profitability.
Source: Customer Satisfaction and Profitability: The Link – 12-14-06
Training is the first domino in retaining and building a talented team/community. Professional football players train all week for the game on Sunday. If you are not actively coaching and training your employees, you can count on:
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- Turnover which hits profitability directly
- Lower guest retention levels, which hits revenue and increases marketing costs
- Incompetence, which costs you time, money and bad press!
Renie Cavallari, Aspire’s founder, chief inspiration officer and CEO, is an energetic trainer, strategist, speaker, author and leader who has delivered measurable results for businesses around the world over the past 20 years.
From December 6, 2007 By: Renie Cavallari Hotel and Motel Management
