Investors in People: What business value does it offer?

A glorified PR exercise, or a rigorous standard that signifies effective management? We look at IiP

You're a people-focused organisation that looks after its staff and keeps them motivated and working at optimum level. So do you really need a badge to prove it?

And, can you really use the same framework to calibrate whether any business is truly nurturing its staff anyway? People are complicated creatures, so is it possible to have a manual for motivating them? We embarked on an investigation into the Investors in People standard to find out exactly how it works and what it can do for your business.

What is Investors in People?

Around 35,000 organisations carry the Investor in People stamp, employing more than 27% of the workforce from a variety of industries. Around 75% are small and medium-sized businesses. The standard was developed in 1990 by a partnership of businesses and national organisations, with the aim of helping companies boost their performance and achieve business goals through the development of their people. Once a business has been approved, it needs to be reassessed every three years. “We look at how their people development contributes to wider business performance. This is then road tested against the standard,” says Simon Jones, chief executive of Investors in People UK. The standard is subdivided into 10 different criteria or indicators, covering areas such as leadership, management, development and training.  “If we take leadership, IiP assessment looks at behaviours and practices that exhibit a smart way of leading and shows initiative,” adds Jones. Designed to mirror a business' own planning cycle, Investors in People is based on three principles: plan, do, and review. A business must be able to show that it develops strategies to boost performance, implements and then evaluates them. Jones insists that the standard is flexible enough to recognise that different sizes and types of organisations will do this in different ways and there is no textbook solution to people development. Indeed, the framework itself undergoes regular assessments to ensure it is relevant to a changing business landscape, and is driven by the needs of businesses.  “It's not prescriptive,” says Jones. “We sit down and talk through the business needs and people development.” For events company The Live Group, it was a good framework for ensuring best practices, says strategic operations director, Tamasine Early, when asked why they applied for accreditation.  “We were a fast growing company and it was a useful structure for developing the business.”  For The Live Group, approval hinged on a number of factors, including getting managers involved and empowered; ensuring training was planned, delivered and evaluated effectively; encouraging ownership; developing core competencies; regular appraisals and demonstrating that targets, the business plan and communication were joined up and linked to company goals.

How does it work?

The standard is delivered through 13 centres across the UK, each of which employs assessors and advisers. Assessment involves one-to-one interviews with a random selection of the staff.  Various other methods can also be used, such as focus groups, written evidence and observations, and the methodology will be agreed with the organisation beforehand. You will be required to divulge information about how you run your business, such as your business plan, to uncover strengths and weaknesses. “The actual assessment (and re-assessment) on site was carried out over a day,” says Mark England, MD of Sentec, which develops meters for the utility market. The company was first accredited in 2005, and successfully renewed this last year, at a cost of £1,586. 

“We had to collect together various bits of collateral, such as the business plan, appraisal processes and training budgets, but this was not particularly onerous, because we were already running the business to the ‘spirit' of the IiP guidelines before we were first accredited.”

The time taken between an initial assessment and receiving accreditation is dependent on how much work you need to do to meet the standards IiP is looking for. At Lewis Communications, accreditation was granted just five weeks after the initial assessment was carried out. The Live Group was first accredited 10 years ago and the process took between nine and 12 months. “We streamlined processes and got them documented. We also formalised some of the common practices that were unspoken and inherent,” says Early, recalling the changes that had to be made to make the grade. However, these days there is a host of information on the Investors in People website ( detailing the criteria you have to meet, so employers can get a pretty good idea if they stand a chance before shelling out for an assessment. “Most employers will be ready. They can look on the website and see how they would measure up, assess against the standard, so there shouldn't be any surprises,” says Jones. Costs vary according to size of the business. A small firm is looking at £250 – £500 for a day's assessment, says Jones, and this is capped at £750 a day. Since companies will get feedback either way, he believes this is highly competitive against other forms of business advice. 

What's in it for you?

Recent research showed that the value of Investors in People is no longer anecdotal. Last November, an independent study by the Cranfield School of Management demonstrated, for the first time, that the standard has a positive impact on company financial performance. According to Jones, this reinforces the value of investing in employees at a time when company managers are highly focused on maximising the bottom-line.  “Firms who engage their workforce at every level through effective management will be rewarded with greater levels of employee flexibility, trust and co-operation and ultimately the bottom-line performance,” he says. “When the workforce is aligned to the business' strategic goals, it enhances its ability to innovate products and services.” The Cranfield research hailed IiP as an example of ‘commitment-based HR', where an organisation works with its people to set shared goals. This contrasts to the common transaction-led approach where the business sets goals and an employee is merely paid to achieve them. In short, the long-term benefits should be palpable. “We didn't see any additional sales from Investors in People but we didn't expect to,” says Early. “The greatest benefit is the support it's given us to create a great culture. We have good retention rates and many people have progressed through the ranks within just a few years. I also suspect that we attract candidates due to the Investors in People kitemark. A recent advert drew in over 200 applications.” Arguably the biggest draw is this PR-ability. The badge is widely recognised and signals to potential staff, clients and investors that yours is a trustworthy organisation. “Our government customers ask about our accreditations and it's clearly a recognised standard in our marketplace,” continues Early. But to really reap the benefits, your efforts can't be tokenistic. You might argue that requiring businesses to reassess every three years is little more than a money-spinner, but this is one of the ways IiP seeks to ensure the standard is maintained and businesses are not paying lip service to people management. “Many people just see the IiP as a badge – an externally recognised award that once achieved is nothing more than a stamp of approval,” says Liz Moss, UK HR manager at Lewis Communications. “However, the biggest benefit for us was that it made us address some of our processes that were not well defined, and improve these for the long-run.” In other words, while IiP can point you in the right direction, creating a culture that boosts performance is ultimately down to you.

England concurs: “I suspect there are quite a few businesses out there that make a big effort to get accreditation, but there's no core belief behind it. When the assessment is over, the status quo returns. It was important for me that we didn't go into this just to get a tick in the box – it was to re-affirm our belief in our principles, and to help us improve.”


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