When the competitive edge cuts out the people

Chief executives claim to attach great importance to such statements as "investing in people gives us a competitive edge" and "people are more valuable than plant and equipment", yet only one in three organisations have a formal, written human resources strategy with a budget attached, according to a survey published to coincide with Investors In People week, which begins on Monday.

The report, compiled by the organisation that acts as guardian of the Investors In People standard and Coopers & Lybrand, the accountants and management consultants, also finds that while 80 per cent of chief executives claim to have made their employees aware of their business strategies, employees are sceptical.

Between a third and half rate their organisations ineffective in really linking business aims and individual workers.

The survey finds that the average organisation spends about 1.7 per cent of turnover on training and development. But even in those organisations that are making some commitment to investing in their people through this means there was reason to doubt how seriously chief executives were taking the issue. Only 11 per cent cited business needs as determining the level of training expenditure - indicating, say the report's authors, "that in too many businesses the use of a sizeable proportion of resource is not being allocated in a properly businesslike way".

They add: "The evidence from the survey is that too many employees are feeling insufficiently engaged and involved and, as a result, feel undervalued. The organisations that seem to succeed in getting the best from their people are those with the right combination of three key ingredients: the infrastructure of systems and processes; the management skills to use the infrastructure effectively, and the commitment to make the phrase 'people are our greatest asset' really live in the culture of the organisation."

Adair Turner, director-general of the Confederation of British Industry, and John Monks, general secretary of the TUC, write in the report's foreword: "If we are to meet the challenges ahead, we must put people at the top of the board's agenda. We must put people at the heart of our business strategy and we must involve our people in understanding and achieving our goals and aspirations"