People: the greatest asset

New research proves that employers who invest in their workforce really do better. By Roger Trapp
The principles behind the Investors in People (IIP) standard are so close to motherhood and apple pie that it is difficult to see why any business organisation should not espouse them. But several years after the standard was developed from a 1988 White Paper on employment, the vast majority of private-sector employers remain resistant to it, according to just-published research.

Those principles are: a public commitment from the top to develop all employees to achieve business objectives, a review of the training and development needs of all employees, action taken to train and develop all staff through their employment and evaluation of the effectiveness of that effort. So it is hardly surprising that those companies that have adopted it significantly outperform those that have not.

Using financial ratios to analyse and compare performance across 20 industrial and commercial sectors, the study by the Hambleden Group, a consultancy specialising in improving the performance of medium-sized businesses, claims to provide "compelling evidence that working towards the standard improves business performance".

The consultancy, which was one of 14 that in 1991 co-operated to pilot the standard, also says its research demonstrates that achieving recognition is a cost-effective investment that works for all types of company.

However, the report - The Hambleden Report (Report No 1: Investors in People Review) - warns that this strong business case is not getting through to the decision makers. The Institute of Chartered Accountants, which last month proclaimed itself the first professional accountancy body to achieve the status, is perhaps typical of the sort of organisation signing up for the standard. The Hambleden Group says only 20 per cent of those that have received recognition are "fully-fledged trading businesses filing public accounts". Many of the remaining 80 per cent are from the public sector and other non-profit-making organisations.

Despite their suitability for the standard, and the presence of such role models as the car-service group Kwik-Fit, wholesaling, retailing and transport are under-represented, though manufacturing and heavy industry are fairly represented.

Even though Training and Enterprise Councils figure strongly among those that attained the standard, their promotion of the concept is "fragmented and inconsistent". The study sees a vast discrepancy in performance between Gloucestershire TEC, with 157 recognitions, to four TECs that have only one each.

Duncan Collins, one of the authors of the report, says: "The successful TECs have a clear vision and see IIP as the key to achieving all their objectives. Others have been slow to take up the challenge, with some viewing IIP as an unwelcome distraction from the delivery of the original Employment Department programmes, which attract much higher levels of funding."

The report, which is based on detailed analysis of 2,314 organisations that have achieved the standard, goes on to say that - four years after marketing began - the enthusiasts for the concept have already achieved recognition and that perhaps only half of the more than 17,000 organisations that have made a commitment to the standard have any serious intention of achieving it. The remaining uncommitted employers - including many financial sector and corporate head offices, concentrated in London - are "impervious to the benefits". Many of these appear "abnormally resistant to new initiatives and are often not especially keen on developing people", it adds.

Mr Collins says: "There is a great deal to be done. But there is now positive proof that developing people pays."