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People Management

Employee Training: Key component of value creation in Service Management

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Paying attention to employee training processes is key when choosing a service provider. Here’s why training is such an important component of value creation in Service Management. 

 

Service quality is consistently ranked as the most important driver of customer satisfaction. Research shows that, in approximately 70 per cent of cases, the identifiable reasons why customers quit doing business with a company in any industry have nothing to do with the product or the operational procedures. Its due to poor service delivery.

In service management industries – such as facility services – this figure is higher.

Employee training is the single most important driver for service quality and is therefore one of the most important internal processes a company can have.

How employee training creates value in service

The service profit chain is a great way to understand the importance of training in the service industry.

The service profit chain proposes a series of relationships which links training (internal service quality) with customer satisfaction (hence customer value) and profitability (hence shareholder value).

As visualized below, profitability and revenue growth are derived from loyal customers and loyal customers result from customer satisfaction, which is influenced by the perceived value of the service.

Employee Training

Service value is created by satisfied, committed and productive employees, and employee satisfaction is generated by investing in, among others, training and employee empowerment.

The service profit chain highlights two important aspects about value creation in service management:

  1. Value is mutually constructed The service employee must deliver a service which must be perceived by the customer as adding value. The important thing about knowledge is not so much what is store inside the head of an employee, but is what that employee does with the knowledge and how this is perceived by the customer.
  2. Training is a key component to value creation in service management The customer experience is in large part a function of effective training. Training of frontline employees is therefore critical in service management, and training development are critical in any service relationship.

 

Training drives productivity

Productivity is a difficult concept to define – especially in the service sector where neither the input or output can be standardized and quality is more difficult to measure compared to tangible products.

Service productivity can be defined; as the ability of a service organization to use its inputs for providing services with quality matching the expectations of customers.

This implies that it is providing service quality which matches the expectation of the customers. This is in line with the service profit chain highlighted above.

Training is one of the most important intangible qualitative inputs a service company has and therefore is one of the most important potential sources of productivity gain.

 

Training drives engagement, retention and satisfaction

The second way training directly affects the external service delivery is in helping employees become and remain engaged. Engaged employees stay longer in their jobs, are more productive, more service-orientated and take fewer days off work.

In short, engaged employees are the key to excellent customer service.

Training and development alone however, do not guarantee employee engagement. A good relationship between employees and immediate supervisors is key to drive superior engagement.

 

Want to learn about the Future of Service Management? Download the ISS 2020 Vision White Book: The future of Service Management here!

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