Food and Beverage

Lack of Training Leads to Business Failure

Numerous report suggest restaurants and hotels are much more likely to go out of business if they do not train.

The report* into training and establishment survival shows that 28% of businesses that didn’t provide training in the industry closed down, compared to only 3% of the businesses that did.

The report, conducted over a 6 year period, shows that 33% of hotels and restaurants are currently not training. 25% of these employers say that nothing would persuade them to train, even though the majority admit that their business would benefit if they did.

Brian Wisdom, Chief Executive of People 1st commented: “Businesses who don’t train put themselves at risk of extinction. They also damage the reputation of the sector and lose valuable human resources.

“The UK Skills Passport service in April [visit skills passport for more information] to enable the vast majority of employers to find the funded support they have never been able to access before. This will help them to provide vital skills and training for their workforce.

“Hotel and restaurant businesses really should consider investment in training and UK Skills Passport as a commercial lifesaver rather than an unnecessary cost.”

Competitive advantage can be sustained if distinctive.

The principal reason as to why. Your competitors’ cannot easily imitate tacit skills. Such competencies are more often than not deeply embedded in organisational culture
(customer service training). If your customers value your staff’s implicit skills this generally makes price an irrelevance. The outcome for those business owners who do choose to train their staff:

  • They can charge a premium
  • and maintain their superior profit margins
  • for a longer period.

Training and Establishment Survival – William Collier, Francis Green & Young-Bae Kim (Skills for Business Publication: March 2007) -full report available to download at the Research section at

Enhancing human resource

Christopher Bird Author


2 thoughts on “Lack of Training Leads to Business Failure”

  1. Another good post about an issue that is not addressed properly in the Hospitality Industry. We usually take the old approach of baptism by fire, which must be corrected and to those who actually train do indeed have a competitive advantage.

  2. Baptism of fire is common and certainly my experience. At interview no questions as to whether I had attended college or have qualifications. If I mentioned I have qualifications and the value to the job the conversation was changed immediately. Employers simply wanted to know, can I do the job, will I do the job and will I fit in with the employers team. Understandable but employers are probably losing out.

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