Employees are assets. We invest in them and expect a return on that investment. I depreciate them, too. This may seem like an unusual way to approach employee management, but it works.
Dedicate 1% of Gross Sales to Training
Like all assets, human assets need to be properly cared for. Therefore, a defined dollar amount -- I believe in 1% of gross sales -- should be figured into your budget for training and retraining. This amount should be listed separately and in addition to your budget for Wages & Benefits. It should be split 50/50 between new hire training and existing employee re-training. In other words, a one million dollar restaurant should invest $10,000 in training and re-training.
How you classify training expenses isn't necessarily a problem, unless you have a management incentive program based on hitting Net Operating Income goals. If training costs are deducted from the amount used to calculate a manager's bonus at the end of the month, you can bet that they'll cut back on training to reduce costs and maximize Net Operating Income.
My recommendation is to award bonuses based on Net Operating Profit -- the dollar amount with the training costs, or "human depreciation," added back in. This will encourage managers to use the full training budget. We add back depreciation for other assets. Training should be no different.
Make Sure Your Investment Pays Off
Don't throw money into an ineffective training program that doesn't work. You might as well wash it down the drain. Make sure your training program is: