Branded a ‘useless quango’ together with the likes of the British Potato Council, Investors in People the ‘kite’ mark of good people management has been keen to throw off the shackles of a bad review; so has it managed it and are employers willing to slay Goliath for the title?

Originally founded in 1991 as the first people quality Standard, Investors in People marked a change in government and business thinking by accrediting businesses as achievers of best people practice.

In the early years, the scheme did not make its intended impact on all businesses. Although it was created for organisations regardless of size, it seemed that only large companies were able to follow the scheme and gain accreditation.

Businesses were put off by the associated bureaucracy and expressed a wish to focus more on the quality of training, customer satisfaction measures, and results rather than targets and processes.

For many small businesses then the Standard seemed an unobtainable programme because it was lengthy and unnecessarily complicated.

The first changes saw a simplification of the language used, a new focus on results rather than process, a slimming down of the 23 performance indicators to 12, a commitment to equal opportunities, greater flexibility in the way businesses and assessors provided and assessed evidence, reduction in paperwork and more choice – accredited businesses were able to select a yearly audit or reassessment every three years.

In November of last year the Standard was revised once again. Dogged by criticism that it was overly-bureaucratic and difficult a new slimmed down version was launched in 2004.

Investors in People say the simplified scheme now places greater emphasis on employee involvement and maximising potential.

And on paper at least it sounds good. Just three principles exist:

• Plan




• Do




• Review

The aim being that the Standard now reflects a typical business planning cycle. This step change together with a greater emphasis on organisational culture, employee involvement in decision-making and management’s role in the development of staff has earmarked a turning point towards a simpler and more realistic people management benchmark.

But despite the uphill slog towards a more svelte like model the organisation has found it hard to shake off its image as difficult and time-consuming. Dealt another blow earlier this year by author of the Essential Guide to British Quangos 2005, Dan Lewis labelled it a ‘useless’ entity.

Eager to separate itself from his remarks, Chief Executive Ruth Spellman said at the time that there had been a ‘misunderstanding of the facts.’

“It is a widely known fact, acknowledged by business leaders and government, that the UK currently faces a large productivity gap compared to some of its international competitors. Unless investment is made in skills and training we will not as a country be able to compete with the best in the world.”

And for Investors in People at any rate their solution is the framework they have created to help organisations channel that investment in staff in the right direction.

Certainly, if the figures are to be believed businesses that work with it are seeing real bottom line benefits. According to a recent independent study conducted by Investors in People, organisational changes made by the organisations with the Standard are twice as profitable as changes made by other companies – a profit gap of £353 per employee per year.

While cash certainly talks, for smaller businesses establishing themselves it has to be recognised that the conditions have to be right for a business to reach this benchmark.

Indeed while most of the literature concerning the impact of Human Resource Development (HRD) (which is one route of attaining the standard) in the UK derives from its observations in larger organisations, there is no evidence to suggest that conclusions reached in that context apply to managing people in smaller organisations argues (Ritchie, 1993).

For those sinking beneath the red-tape burden and struggling with employee form-filling it might just be a far-off distant dream. Certainly as a badge of honour for doing the right thing by staff, it’s not for those hankering for a time before the minimum wage and the intervention of the nanny state.

Indeed looking at Abraham Maslow’s theory of a hierarchy of needs, in which he attests that human beings can only move up the rank of wants and need when lower levels are met including physiological and safety requirements, it soon becomes apparent that this is a standard only relevant for those in the business of fulfilling self-actualisation and self-fulfilment desires.

Many small businesses are merely surviving on a shoe-string, festering at the lower levels of Maslow’s hierarchy of needs. For start-ups and growing businesses the picture is much the same.

I spoke to Ed Groves, co-founder of EvolutionRecruit a recruitment agency specialising in the Insurance and Financial Services markets who told me it was a ‘nice to have’ as a benchmark for the future:

“Investors in People is something that, as we grow, we would definitely look at. It is important for every growing small business not only to attract the right individuals to work for them, but also to keep them as your company develops. Anything that facilitates a happy and productive workforce as well as encouraging new staff to join is a good thing.”

In its simpler guise, Investors in People is starting to look more like the work of an organisation that has listened to what businesses want and can realistically achieve rather than the produce of a ‘useless quango’.

And in a tight jobs market, smaller businesses could do worse than achieve a standard which at least flags up to candidates that this is ‘a good place to work’ and not a sweatshop.

Finally it would seem that Investors in People has achieved a Standard which no longer resembles a battle on the scale of David and Goliath and for that they must at least be thanked.

At the time of writing there are currently over 38,000 organisations recognised by Investors in People in the UK.