Why training an Investment?
Scenario of Hospitality Industry
- It is vital for the hospitality business today to have highly trained employees. The current environment faces fierce competition not only for the guests but also for the employees.
- Now the constant challenge for the managers of hospitality operations is to hire and retain sufficient trained staffs.
- Today hospitality industry focuses on accounting of human assets and their value in a high service industry.
- In preparing for the upturn and to be ready to seize the opportunities for more businesses as the economy recovers, businesses need to invest in staff training, even during the economic downturn.
So, today training is termed as an investment because it values the outcomes as a assets which will pay off the invested amount with large returns in the long run.
- “Only meaningful economic resource is knowledge” Preter Drucker
- “The human capital theory” by Gary Becker suggests that; employees, business, and society receive a direct economic benefit form investment in people.
- “The key to national economic growth is investment in education” UNHD report
- Developing the human capital will increase the ability to adapt to environmental changes and become learning organization.
A1. Measuring the benefits of training and extrapolating throughout the organization will conform the training’s return on individual ( ROI) in human capital. The measurement of benefits can be viewed in:
- Absenteeism: the frequency of the employee not appearing on the job, which results to large operational problem. It occurs due to low morale, low motivation, level of stress, increase accidents and illness, management insensitivity and lack of response to the critical needs of employee.
- Turnover: The entire cycle of losing employees and the process of replacing them.¢ Business with strong communication systems enjoy lower staff turnover.¢ Employee training is the most useful tool to fill this problem by— Increase job satisfaction, involvement in corporate culture, decision making, jobs, and organizational stability.¢ It includes costs— Separation cost: maintaining files, conducting exit interviews, separation pay, unemployment taxes, and termination of benefits.— Replacement cost: search, background checks, buying new uniforms, interview cost.— Training cost: orientation cost, printed materials, trainer wages.¢ High degree of job satisfaction through increased training programs leads to higher retention rate. It means low turnover which is highly correlated to high guest returns and investor interest.3. Recruitment: manger should be aware of the cultural diversity issue while hiring people who are likely to succeed in the position according to knowledge, skills, experience, and language needed to fill the position. The cost of recruitment includes; advertising, application forms, interviewing, reference checks, etc.
Budgeting Training¢ Historical Perspective:— Fail to promote training and their value— Trainer used to play multiple roles.— Training as an expenses— Training and development were board.¢ Today’s perspective— Held more accountable financially.— Trainer and management promote training— Training as an investment.— Formulation of training budget which ensure that all employees receive some training each year.— Zero based budgeting, which built training budget from the front line up each year.¢ Sharing cost with others— There is always limitation of resources.— Charging the user department for the training.— Development of competency based curriculum.— The training proposal.— Require to win funding and support for training.— It is a complete report on training— It defines objective, goals, cost, time etc. of the training.
Cost of training:
¢ Costing practices:— Use systematic approach— Determine the life of the training.— Determine costs to every overhead early.¢ Collecting the Data:— Maintain all original quotes, estimates and invoices.— Gives more validity to the proposal.¢ True costs:— Labor cost¢ Payment and wages to instructors, technicians, any support staff, and training developers, trainees’ wages.— Material cost:¢ Determine all the material s require for training and divide into expendable and non expendable group.— Delivery cost¢ Cost incurred during the actual delivery time and those which facilitate the delivery process.— Other costs:Ø Replacement cost: cost of individual substituting for the training.Ø Overhead: Different factor used in training, desk, table, chairs, office supplies, rent, etc.Ø Pre- program cost: It include all the cost associated with the problem and process analysis when identifying training needs.Ø Follow-up: Surveys, questionnaires, interviews, trainees time, supervision’s time etc.Ø Indirect: maintenance, support services, equipment, telephones etc.Ø Cost of cost analysis: training plans, time spent in conducting the analysis, cost of software to help analysis.Ø Opportunity cost: they are the cost which is incurred for leaving the next best alternative.¢ Sources of cost: It will help in accurate estimation of cost, which can be obtained through:— Instructional Designers, Trainers, Articles, Colleague, Previous cost analysis, suppliers etc.¢ Intangible cost: Are those cost which is not easily quantifiable.— Opportunity cost, ineffective training, etc.
Benefits of training¢ Who benefits from training?Ø EmployeesØ GuestsØ ManagementØ Property or organization.Ø True benefits in value or monetary saving.
Sources of benefits: waste reduction, less turnover, less absenteeism, check- in- time efficiency, guest comments, etc.
Areas of operation where cost can be saved.
Labor:Time saved*Amt. of days being examined* no. of subject= Total timeTotal time saved* the full cost subject wage and benefits= Total labor benefit. (Ex:9)Material: more efficient use of materialsEquipment: more optimum use of the equipment.(Ex:p69)
Intangible benefits:Ø The benefit of the training is in the good will that it generates in the community and the desire to avoid a crisis.Ø Positively influence the attitude and behavior of the employeeØ Increased guest satisfaction, payback, value, and level of advancement.
Cost Benefit analysisØ It is tool to systematically compare the financial picture of training. It compares the cost as the benefits derived from training.Ø It is effective in evaluation of training.Ø It provides accurate data to be included in training proposal.Ø IT will help in better panning of training session, and align it with the goals and objectives of the organization.Ø The three steps are: calculate cost, calculate benefit and compare results.
Return on Investment:
Ø It financially focuses on evaluation, an examination of the effect of training on the work place through measuring three specific sectors.o Profit, productivity, performance.Ø To vividly determine the ROI, the trainer needs to define the specific problem and identify the expected training outcomes.Ø Tools used to determine the ROI are:
v Cost benefit analysis: It compares the cost of training to benefits derived from it.v Cost effectiveness Analysis: It is used when it is difficult to measure the training results in dollars. It helps to choose the best training, compare costs between several training program and ways of reduction of the costs.v Cost feasibility Analysis: It examines the overall training budget and gives answer to “Can we afford to do this program?” Sometimes even though benefits outweigh costs, the training need to be postpone due to feasibility problem.v Cost of not training: It is the loss of profit and productivity that a company could have gained with better trained staff.
As turnover results the severe impacts on guest service,the organization has to provide training and other attracting opportunity to retain their employees.The investment in training has long term benefit.Training along with motivation programme for staff should be continued even the organization is bearing loss.Hence,the best way to sustain and overcome the loss in business is through the consideration of training and development as a continual process.
ReplyDeleteTraining is used to educate the employees on the now of a business; development is much similar to training but is used to educate the employees on the future changes, goal settings, and responsibility. The right employee training, development and education, at the right time, provides big payoffs for the employer in increased productivity, knowledge, loyalty, and contribution. Learn the approaches that will guarantee our training brings a return on our investment.
ReplyDeleteThe right employee training development and education at the right time provides big payoffs for the employee in increased productivity ,knowledge ,loyalty and contribution .learn the approaches that will guarantee your training brings a return on your investment.
ReplyDeletePraveena Rana
3rd sem
sec.C
for better operation of organization training should be provided according to the requirement. training should be provided by knowing the productivity, knowledge, loyalty, contribution, etc. providing training unnecessarily will decline in productivity, and will increase the expenses which will not benefit for the organization.
ReplyDeleteHighly trained employees are very vital for the hospitality industry today. Training not only benefits employees but also the management, guests and the industry as a whole. Today training is regarded as an investment because it will give the desired outcome in the future which is very useful in the long run. Turnover can also be less when the industry provides training to the employees because it helps them to build their morale, have self satisfaction and also motivate them. So, every industry should try to give the best training to their employees............
ReplyDeleteYANGZI SHERPA
SEC= 'B'
Training is considered to be very important in the hospitality industry as it is beneficial to the employees,employers and also the industry.It is very challenging for the hospitality industry to hire and retain highly skilled staffs.Training is regarded as an investment because it will give benefits in the long run.So,industries need to invest on staff training to run their businesses efficiently.
ReplyDeleteMadhuri Shahukhal
Sec:'B'
training can be considered as one part that can neither be ignored nor skipped while recruiting any staff for any position. It sharpens and polishes one's ability to perform the duty slowly leading to an ultimate development. Training, however can cost more but it is always worth more than that very cost .
ReplyDeleteRoshan Shakya
Section: B
Training was treated as an expense.But no longer it is treated that way inspite it is treated as an investment.Training is investment in people where employees view it as an assest as its outcome is also seen as an assest.Increased training results to high level of job satisfaction which leads to higher retention rate.The cost of training should be accurately calculated to determine its return on investment.training not only benefits the employee but also the management,guest and the property indeed.
ReplyDeleteTraining is considered as an investment as it gives benefits in the long run.Training benefits employees,guests,management and industry as well.The right staff training results in increased productivity,performance and profit and can also results in the return on investment.
ReplyDeletetraining and development helps to provide company with skilled persons and decreases the complaints from guest. training also helps in controlling high turnover in a company. so training is a investment to the employee of a company
ReplyDeleteTraining was treated as an expense.But no longer it is treated that way inspite it is treated as an investment.Training is investment in people where employees view it as an assest as its outcome is also seen as an assest.Increased training results to high level of job satisfaction which leads to higher retention rate.The cost of training should be accurately calculated to determine its return on investment.training not only benefits the employee but also the management,guest and the property indeed.
ReplyDeleteTraining is now considered as more of retention tool than a cost.It help employees in achieving their personal goals, which in turn, enhances the individual contribution to an organization.
ReplyDeletelabin maharjan
sec:C
Training helps employee to decrease employee morale.If treated training as an investment then the organization will get good return on investment. Training provides skills to every employee which automatically will turn in guests satisfaction.
ReplyDeleteTraining is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts, rules, or changing of attitudes and behaviours.It is very important and said to be benefit to the employee but also the management,guest and the property indeed.Training, however can cost more but it is always worth more than that very cost .
ReplyDeletebasanta aryal
sec:C
In todays's generation training has been considered as "LIFEBLOOD" of any organization. Before this it was taken as expenses but in today's context its an investment where entrepreneurs desire to invest on trainee.Training is one of the vital part to be noticed, better you give the training employee will be more skilled and secured as a result the outcome will be great. Its a way of getting benefit for employee as well as for organization.One basic advantage will be low in turnover rate.
ReplyDeletetrainig is necessary so all employee of an organisation should be well trained.
ReplyDeletetrainig is necessary so all employee of an organisation should be well trained.
ReplyDeleteIts simple that your company could have gained more profit or more productivity with a better- trained work force(employers). In any company whose G.M or C.E.O think that training its employers is an expenses & it is waste of time & money then that company cant go ahead & that business will never gets benefits... ....
ReplyDelete"Hospitality is a business of people, by people, & for people, & the better the people, the better the business" i think this slogan is perfect for this chapter whereas to make the employers better training is essential!!!!~
ReplyDeleteTrained work-force would obviously keep the business one step ahead of the competition & I totally agree with shuman & lelil.
ReplyDeleteTraining and development is taken as an investment in this competitive age.
ReplyDeletePerformance problems occur because employees (1) don’t know what they’re supposed to do, (2) don’t know how to do it, and/or (3) don’t know why they should do it. Targeted training is one solution to all three factors.
What’s worse than training your workers and losing them is not training them and keeping them.
Natasha Prajapati
Sec:C
training and development helps to provide company with skilled persons and decreases the complaints from guest. training also helps in controlling high turnover in a company. so training is a investment to the employee of a company
ReplyDeleteTraining and development is important in sense that it helps employees to perform their task more better way which inturn will benefit the organization.SO if training is treated as an investment then the organization will get the good return on investment.
ReplyDeleteTraining is the development of skills and knowledge of the employees. It is beneficial to the industry to provide training to its employees..... If any hospitality industry takes training as not necessary, then they are going towards their end... Training the employees may cost some amount, but the industry will be benefited throughout. I think the turnover takes place due to the lack of training that is not being provided by those organizations...
ReplyDeleteKalpit Pal
Sec: 'B'
Training and development is a essential factor in today's hospitality industry . training leads to the success of every organization . it can better profits of the industry and help the employees develop internally as well.
ReplyDeleteSudip Lama
Section-"B"
i do agree training as a investment but it is not always secure in term of what training itself is in-consistence. how to secure the investment of training ??
ReplyDeletesorry forget to write my name.
ReplyDeleteSujit Kumar Pathak
Section B
what are the benefits to training and how can they be quantified?
ReplyDeletetraining is an investment on employees and it helps your organization to survive and perform well on the fierce competition. But is it always beneficial for the organization.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteTraining is a support system designed to enhance an employee's abilities, and you need to determine what exactly the employee need to learn.
ReplyDeleteThe training needs assessment is the tool that identifies organizational problems and helps to get to their root cause. Only when you know where the true problems lies can you create an effective training program that imparts the most effective skills, knowledge and attitudes to employees that they will in turn transfer back to the workplace.
Roshan Shakya
Section B
Training is always an investment if done systematically and evaluated timely.
ReplyDeleteSanjeev Khadka
section c
for better operation of organization training should be provided according to the requirement. training should be provided by knowing the productivity, knowledge, loyalty, contribution, etc. providing training unnecessarily will decline in productivity, and will increase the expenses which will not benefit for the organization
ReplyDeletehari lamichhane
sec; b
it helps the hospitality industry from turnover, recruitment and other labour expenses
ReplyDeletetraining and development is must in todays hospitality industry.by providing training to the employ it is easy to perform the task.
ReplyDeleteEvery organizaton should invest on good trainjng which is very useful for the employees and organization as a whole which ultimately results in success of the organization
ReplyDeleteInvestment on training makes the best result
ReplyDeleteTraining is one of the important part in hospitality industry .Nowdays hospitality business have highly trained employees.Todays training is termed as an investment because it values the outcomes as assets which will pay off the invested amount with large returns in the long run.There should be motivation along with training for staff.
ReplyDeleteNirmal Roka
Sec:B
training is no more an expenses rather it is an investment in an organization for effective n fast service and profit in bottom line . And personally too because one can make himself capable of upgrading career path.
ReplyDeletetraining is very essential for every employment because employee is a assets of the organization which needs to be upgrade.
ReplyDelete