UK: Join the Investors in People club and reap the benefits productivity.

UK: Join the Investors in People club and reap the benefits productivity. - People management: many SMEs are dubious about IiP.

Last Updated: 31 Aug 2010

People management: many SMEs are dubious about IiP.

Keith Ellis employs 56 people at his Kent-based firm, Kenard Engineering, which achieved Investors in People Standard (IiP) status in March 1997.

While recommending IiP, he is not surprised that many small firms are put off. Gaining IiP is time-consuming, requires full support from a firm's bosses and, in Kenard's case, meant ignoring the jargon of a HR consultant who, Ellis admits, almost put them off before they even started.

IiP provides a framework for improving business performance and competitiveness by linking the training and development of people to the achievement of business goals. Developed in 1990, it is currently used by more than 30,000 large and small UK firms to review and improve employee performance and, as a result, the overall effectiveness of the organisation.

Well over one third of organisations that have achieved IiP employ less than 50 people but the SME sector (which accounts for 27% of the UK workforce) has a lower than average take-up of IiP. The non profit-making scheme administrator, Investors in People UK, stresses the key role that IiP can play in helping SMEs achieve improved profitability and productivity, increased motivation, public recognition and business performance and cost reductions.

But Ellis' reservations are confirmed by recent research from Investors in People UK. This suggests many small firms still have problems understanding exactly what IiP is meant to achieve and others remain highly sceptical of any initiative that appears to be 'official'. Most conclude that IiP is a costly exercise, bogged down in bureaucracy, is aimed at bigger organisations and of dubious benefit to smaller companies.

While the reservations expressed are understandable, the benefits appear overwhelming. Independent research into IiP firms of all sizes shows that two-thirds attribute improvements in performance directly to adopting the standard. Far from being a straitjacket, the IiP framework simply aims to help organisations achieve their goals by using people better.

Moreover, the IiP philosophy has just four principles: commitment to develop all employees to achieve business goals and targets; regular review of training and development needs in the context of the business; relevant action to meet a person's training and development needs throughout employment; and evaluation of training and development outcomes as a basis for continuous improvement.

The traditional route into IiP is to contact the local Training and Enterprise Council in England and Wales, the Local Enterprise Company in Scotland, or Training and Employment Agency in Northern Ireland. However, Investors in People UK has recently launched a new eight-module programme, Building a Better Business, to allow business owners and managers to enjoy best IiP practice without the formality of assessment. Priced at £65, it could help some SMEs overcome their reluctance to joining the IiP club.

Judith Oliver is a contributing editor for Management Today.

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