Investors in People: Could it work for your business?

Is Investors in People really worth the effort?

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Motivating your staff will make them work harder. It seems so simple when it’s written down. But like breathing or your heart beating, until you run a marathon, business owners can sometimes forget this essential step for unlocking employee engagement.

In your day-to-day race to make deadlines, move items, manage finances and meet and keep customers, some things inevitably fall by the wayside. In

1990, a consortium of civil servants and industry leaders established Investors in People (IIP), the staff management standard by which some 37,000 businesses have since been accredited as ‘superior people managers’. But does its philosophy work for every business?

What is it?

Investors in People is about continuous improvement, and that is a principle its director of quality, June Williams, believes should gel with every business.

“The whole ethos is that you need to involve staff and review performance,” she says. “Looking at management structure gets companies to think about their business needs. Oddly enough, many organisations don’t automatically do this.”

The standard rests on three principles: plan, do and review. A successful business develops strategies to improve its performance, it implements those strategies, and later it revisits and adjusts them according to the results.

For Lee Oakley, sales manager for Liverpool-based internet hosting company Switch Media, becoming accredited was simply a way of reaffirming the business’ commitment to people development. “The secret to making it work is to have the approach in the first place,” he says.

While IIP counts giants such as McDonald’s and Sainsbury’s among its standard bearers, Oakley believes it is important for companies of all sizes to adopt the right approach early, or struggle with it later. “We were small enough when we thought about these things, so it became ingrained from the outset. As we grew, the systems were in place,” Oakley says.

What do you have to do?

Accreditation is not just given away. A fair number of companies don’t make it through their first assessment. The assessment begins with on-site interviews of a random selection of staff.

Assessments cost £550 a day, and their length depends on your company’s size. For small companies, IIP’s assessors may interview all its employees. For larger companies, it could be up to 35%. Businesses with fewer than 250 employees pay an average of £1,100, but much of this cost can be relieved through grants from services such as Business Link.

Following the interviews, assessors give feedback and deliver their recommendations to an expert panel, which investigates the reports. Only in borderline cases do they re-approach staff for further questioning.

It generally takes three weeks from this point to receive confirmation of recognition, but this time scale can vary depending on any changes your business may need to make and how quickly you can put them into practice. Accreditation is awarded indefinitely but is subject to regular reassessments no more than three years apart.

IIP says it is realistic for most companies to expect to complete the process within a year, at which point you may advertise your company with the organisation’s logo. Accredited companies may also purchase IIP products to promote their new status and will receive a plaque noting their achievement.

Tangible benefits

But at the end of the day – or, rather, the fiscal year – can a logo on your company letterhead really make a difference to your bottom line? IIP cites an independent April 2004 study showing 7% increases in profi ts for accredited companies, compared to around 4% for non-accredited businesses.

Switch Media’s Oakley concedes it will be hard to quantify any measurable effect on its turnover. “Accreditation is recognition for having the process established in the first place, so I can’t imagine it’s going to make much of a difference to our bottom line,” he says. “You are seen as a more serious organisation though, which helps in recruiting both new customers and staff alike,” Oakley adds.

Kerry Hallard gained IIP accreditation for her 12-person business, Buffalo Communications, in 2002, but when it came time for review, she reassessed, as the standard’s guiding principles dictate, and decided that IIP didn’t go far enough for her company.

“It’s a good platform, but I don’t think it’s enough for peoplecentric companies,” says Hallard. “I don’t think it really changed our profile, and it didn’t bring any more business into the company. In our industry it’s already a given you will have something like this in place.”

While she isn’t closing the door on someday renewing her accreditation, Hallard believes IIP is more about image and profile. The standard is very basic, she says, and in the communications industry people management demands are more stringent; re-evaluation is more frequently required.

Williams admits the benefi ts of wearing the badge are very diffi cult to measure. It is not easy to compute complicated equations such as human emotions, but there are ways in which to narrow it down.

“Some things can be quantifi ed, and we ask them to identify it when they can,” Williams says. Knowledge and attitude contribute to a company’s performance, she says, and if those improve, it is doing well. But reassessment is key. The crux of the standard is a persistence to get companies to stop what they’re doing, look at how they’re doing it and ask themselves if they can do it better.

Staff motivation and retention

Beth Aarons, HR manager at Midlandsbased hotel chain City Inn, took this approach when trying to comprehend her industry’s rising staff turnover rate. From City Inn’s assessment, she learned that people need to feel like they have an opportunity to grow within their company. Since City Inn’s accreditation, Aarons says management spend more time talking to employees about their development, where before there was a perceived lack of opportunities. As a result, vacancies have fallen by almost 50%.

And yet the benefits can be measured still in other ways. For another entrepreneur in the hospitality industry, it took a tragedy to put IIP’s benefi ts into focus. When bombs exploded on the London Underground last summer, Cyrus Todiwala and his staff at Café Spice Namasté saw the horror unfold at their premises just 240 yards away from Aldgate station.

Business soon dropped off. Todiwala lost £90,000 in three weeks at his two restaurants and café. But he credits the commitment of his staff of 36 as the suture that saved his business. Faced with lay-offs and closure, Todiwala’s employees agreed to accept their salaries in arrears, which he says was crucial to helping his business survive.

In his industry, he says, a motivated workforce has added importance. IIP helped him recognise the empowerment of training, and he now invites staff to seek guidance in anything they feel will give them more confidence at work. People have come forward seeking English training, computer courses, cooking, guest relations and even health and hygiene.

“We now have an amazing retention rate, and this gives us serious energy to grow,” Todiwala says. “One thing I’ve picked up on is that my business was too patriarchal. Everyone looked to me to make their decisions. My staff now know they can take certain responsibilities without being reprimanded. They’re more empowered, and that is how we grow. The whole accreditation is down to you understanding your weaknesses and being aware of how you can fine tune things.”

Ultimately, consistency in your product is important, he says, and it is your staff who deliver the standard.

Through IIP, employers are now finding benefits in a committed staff they might not have considered before, some that can be measured and some that are immeasurable. The solo marathon of the past appears to be ending. As your business strides toward the quarter-mile mark of its growth curve, the cadence of other legs beside you can help you maintain, if not quicken, your pace.


  • Staff more committed
  • Expand your profile
  • Shown to improve staff retention rates
  • Reduced costs and wastage
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