Turning A Cost Center into a Profit Center
How a restaurant business turned its employee development program into a scalable revenue stream.
The Challenge: Developing Top-Notch Employees
Getting and keeping good employees is always a challenge for restaurants. A startup restaurant chain knew they needed trained, loyal employees, so they developed a top-flight training program. The program graduated employees who were much more skilled and loyal than those produced by other training programs in the industry. It also generated social impact by helping employ people who had been out of the workforce for an extended period.
The program was successful on all fronts, turning out a loyal and motivated staff with higher retention rates and helping previously unemployed individuals.
However, there were two challenges. First, while much lower employee turnover saved money overall, the company was in a tough market and needed to find ways to create even more financial benefit. Second, high retention rates limited the number of new hires the restaurant needed, limiting the program’s community impact.
The Solution: Creating a Monetizable Talent Pipeline
Using one of the techniques in the ROI Multiplier System™, we identified a way to turn the program from a cost center into a profitable revenue stream.
Program Investment
The first step was to expand the program, producing even more qualified and trained employees. This resulted in more program graduates than the company could employ themselves, which is where the second step came in.
Revenue Expansion
The company offered local hospitality and food service companies the chance to hire the program graduates it could not. Because people who completed the program had high skill levels and low attrition rates, other local firms paid the company a placement fee when they hired a program graduate.
This turned training from a cost (albeit a very worthwhile one) into a profitable revenue stream. And it enabled the company to hire the best of the best from the local talent pool.
Key Achievement: Converting a cost center into a profit center through business model innovation.
Community Impact
As a bonus, it also increased the company’s social impact, since they were able to help greater numbers of people rejoin the workforce. In fact, the company became one of the top partners for the local workforce development agency.
Strategic Outcome
The Outcome: Turning staff development into a profitable revenue stream allowed the company to diversify its income sources, offset the program’s cost, and create benefit the community at large.
The Bottom Line
The company broadened their view of what was possible and used one of the techniques from the ROI Multiplier System™ to change one of their largest costs into a source of profit, while benefitting the community within which they operated.
