Investors In People Realising Business ambitions through people in times of change

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1 Investors In People Realising Business ambitions through people in times of change At the age of six I wanted to be a cook. At seven I wanted to be Napoleon. And my ambition has been growing steadily ever since. Salvador Dali A man s worth is no greater than his ambitions Marcus Aurelius Presented by Lucinda Martin, Ros Elwes April 29 th 2008

2 Agenda Background and Aims Approach The value of IIP in times of change Research Considerations Questions & discussion Next steps Appendix: Bibliography 2

3 Background During times of economic uncertainty it is key for IIPUK to: Increase workforce penetration even further Retain significant proportion of organisations working with the Standard During the last 3 years IIPUK have commissioned a number of studies To identify how UK organisations benefit from working with the Standard To measure awareness and standing with Industry and the public 3

4 Aims To build on this research work to demonstrate: The value of adopting and maintaining IIP status to ensure profitable growth in times of economic uncertainty and organisational change The results will help to inform: Marketing Messages Research Strategy 4

5 Approach Paper compiled by team from COI Strategic Consultancy building on: Research studies identifying how organisations benefit from the Standard Studies tracking awareness, and standing with Captains of Industry, employers and the general public Case Studies showing how IIP has helped UK organisations respond to changing conditions and improved their position in a competitive market place. 5

6 Challenges facing UK organisations in times of change

7 Need for Dramatic Increase in Skills Flexibilities, Innovation and Productivity to Outpace the Competition 7 Source P: Lord Leitch s Review of Skills Recommendations February 2006

8 Effective Investment in People is Key to Differentiation and Innovation in a Fiercely Competitive Arena UK companies will have to compete more in the future on unique high added value and innovative products and services. This will require inspirational leadership and stronger management and leadership skills 8 Source P: Innovation Report: Department Of Trade and Industry 2007

9 IIP advantage in Times of Change IIP recognise that investment in training and development of skills alone will not provide a sustainable impact on business and organisational performance in the UK unless this is placed in the broader context of business strategy and aligned with, and supported by, effective leadership and management practice 9 Source Q: IIPUK Remit and Aims

10 Helping Organisations Manage Growth Ambitions in Downturn Major Business Refocus Improve and Re-engineer Skills Base to Boost Competitiveness Profitable Sustainable Growth Rationalise And Restructure 10 Innovate and Seize New Growth Opportunities Workforce Engagement

11 IIP Market Impact and Success in Times of Change Now used successfully by over 48,000 organisations employing one third of UK workforce, people. (Source: N) Latest version of Standard provides rigorous performance testing on issues of leadership and employee involvement Valued as useful business improvement tool that is relevant and up to date (85% of employers) (Source: C) High levels of employer satisfaction Assessment process (88%) Propensity to convert amongst committed(83%) Propensity to renew (94% of recognised) (Source: E) Recently awarded Business Superbrand Status (Source: O) Exported successfully to 27 countries. (Source: A) 11

IIP Market Impact and Success in Times of Change Quality standard viewed increasingly favourably amongst Captains of Industry with rising advocacy levels,especially those in IIP companies (Source: H)

12 IIP Market Impact and Success in Times of Change Quality standard viewed increasingly favourably amongst Captains of Industry with rising advocacy levels,especially those in IIP companies (Source: H) Very high awareness with employers 40% unprompted and 99% prompted High recognition of positive business benefits amongst IIP recognised employers (Source: B) With the public in general Most recognised and top of mind Standard Nearly 40% preference to work for IIP accredited organisations. (Source: I) 12

13 Holistic People Management Pays Adopting a pro-active people development framework like IIP can play a significant part in business success Independent study shows that organisations of all types and sizes with a comprehensive approach to people management perform better than those without, indicated by higher profits per employee, higher profit margins, and higher productivity. Just a 10% increase in investment secures an increase in gross profit per employee of over 1,500 pa Younger firms and those committed to innovation led strategies score better against key investment pay back indicators 13 Source K: People and the Bottom Line. P Tamkin, M Cowling, W Hunt IES 2008

14 IIP Recognised Companies have Higher Levels of Non Financial and Financial Drivers Regression analysis (controlling for industry and company size) (indirect relationship) (indirect relationship) IIP Accreditation + + Perceived Non-financial Performance Quality of products & services; attraction & retention; relationships; customer satisfaction Innovation Perceived Financial Performance Turnover; profitability; growth in sales; market share + Financial Performance Turnover ROA 14 Source F: Impact of IIP and HR Policies on Business Performance: Bourne, Franco-Santos, Pavlov, Lucianetti. Cranfield School of Management 2008

15 % IIP Boosts Performance and Profits in Manufacturing 70 % balance of change in productivity and profitability in past 12 months by IiP status Awarded Working towards No Productivity Profitability Source K: Skills for Productivity: Can the UK Deliver? EEF Study 2006

16 How IIP achieves business benefits during times of change

17 How IIP Achieves Business Benefits A. Embeds Strong Change culture and leadership to realise ambitions Proven bottom line impact 17

18 Embeds Strong Change Culture and Leadership to Realise Ambitions New Choices Framework particularly effective change agent during slowdowns (Source: U) This is endorsed by IIP recognised organisations Majority of Captains of Industry agree that it aligns my people management strategies to business strategies (Source: H) 80% of employers agree that it helps all types of organisations adapt to change and growth and majority endorsement of provides value for money (Source: B) Public Sector organisations claim IIP played important part in managing change and integration of a new organisational culture (89% agree). (Source: J) Around four in five employers working with the latest version of the Standard feel they have benefited from an improvement in management and leadership skills (Source: C) Cranfield Impact Study proves that companies that rate high on communication practices have higher levels of profit margin performance. (Source: F) 18

19 Embeds Strong Change Culture and Leadership to Realise Ambitions IIP has been a catalyst for our transformation from a traditional consultancy practice into a forward looking and vibrant consultancy business. IIP has contributed significantly to a remarkable 32 per cent increase in the firm s profitability in the past three years Source: Cooper Parry Case Study We have gone from the 1950s to the 21 st century in two years and we owe much of this achievement to the Standard. It has made us better leaders and managers, and helped us to build a more motivated and stable workforce. Source NCP Case Study 19

20 How IIP Achieves Business Benefits A. Embeds Strong Change culture and leadership to realise ambitions Proven bottom line impact B. Reduces cost and wastage through focussing people development on realising ambitions 20

21 Reduces Cost and Wastage by Focussing People Development on Business Ambitions Improving efficiencies and reducing costs key in slowdowns Money can be wasted on unstructured expensive training Four in five of employers working with latest version of Standard agree they had benefited from: The identification of weaknesses in and improvement of staff development Seven in 10 agree it has made their HR management and processes more systematic (Source: C) Public Sector employers valued the IIP process for; Improving HR Management and development (93% agreement) Improving operational management (over 80% agreement). (Source: J) 21

22 Reduces Cost and Wastage by Focussing People Development on Business Ambitions Just four years ago the business was heavily in debt. Staff turnover was high and turnover was 20% of the 2007 figure. The impressive change in this business s fortunes is based on two things gaining control of finances and adopting the IIP Standard. As a result of these actions the business is now debt free with a loyal team of staff and increasing turnover. Source: Kelray Building Maintenance Case Study 22

23 How IIP Achieves Business Benefits A. Embeds Strong Change culture and leadership to realise ambitions Proven bottom line impact B. Reduces cost and wastage through focussing people development on realising ambitions C. Delivers improved skill levels and flexibilities to realise ambitions 23

24 Delivers Improved Skill Levels and Flexibilities to Achieve Business Ambitions Improving skills to seize new opportunities/innovations key during slowdowns Poor skills can cost a business employing around 50 people 185,000 per annum (Source: A) Cranfield Impact study shows that companies with IIP recognition have higher skills and behavioural flexibility than their competitors (Source: F) Employers within IIP organisations believe: IIP links skills and development to organisational strategy (95% agreement). It has helped to raise employee skill levels (75%) (Source: B) 24

25 Delivers Improved Skill Levels and Flexibilities to Achieve Business Ambitions Working with the IIP Standard has helped our employees recognise the importance of day to day development. People can see clearly the knowledge and skills they ve already developed and what knowledge and skills they need to become better managers. This has been critical for developing future managers and supporting our expansion plans Source HMV Impact Case Study 25

26 How IIP Achieves Business Benefits A. Embeds Strong Change culture and leadership to realise ambitions B. Reduces cost and wastage through focussing people development on realising ambitions Proven bottom line impact D. Increases commitment, effort and results by matching people development to realise ambitions 26 C. Delivers improved skill levels and flexibilities to realise ambitions

27 Increases Commitment, Effort and Results by Matching People Development to Business Ambitions Keeping and developing talent is key during slowdowns CIPD estimate that average cost to recruit new member of staff is as high as 3,600 (Source: A) Cranfield Impact Study shows that IIP companies have higher levels of trust, co-operation and commitment than competitors non financial indicators that lead to improved financial performance (Source: F) Amongst IIP employers high level of agreement that: It helps people achieve their potential (80%) It leads to improved staff commitment (90%) Being an IIP is something to be proud of (95%) It s recognition of company commitment to employees (97%) (Source: B) 27

28 Increases Commitment, Effort and Results by Matching People Development to Business Ambitions Since working with the Standard our commitment to our people development has truly paid off for all concerned the value we place on individuals has allowed us to charge our people out at better rates and consequently we can pay them more. This has had a dramatic effect on staff turnover which has steadily reduced since we gained the Standard, averaging at just under 10% in the past four years, in contrast to an industry which is now 45% Source AA Security Case Study Since working with the IIP Standard internal satisfaction scores have improved year on year by 6%, with 78% of employees saying they love working for the paper Source Metro London Case Study Investors in People is the greatest success story of people management Source: CBI Case Study 28

29 How IIP Achieves Business Benefits E. Improved competitive edge, reputation And performance A. Embeds Strong Change culture and leadership to realise ambitions Proven bottom line impact B. Reduces cost and wastage through focussing people development on realising ambitions D. Increases commitment, effort and results by matching people development to realise ambitions 29 C. Delivers improved skill levels and flexibilities to realise ambitions

30 Improves Competitive Edge, Reputation and Performance Mission critical for profitable growth during slowdowns Employers with IIP recognition believe that it: Produces a competitive edge (70%) Is recognition of commitment to employees (97%) Is a prestigious world class standard (58%) Helps to attract new customers (58%) (Source: B) Nearly forty per cent of employers in smaller firms felt they had gained a competitive advantage over their competitors (Source:P) 30

31 Improves Competitive Edge, Reputation and Performance Leadership development and greater provision of induction and development training through the Standard has led to an improved ability to meet new business tender requests. This, coupled with strong customer endorsements, has helped to increase new contract wins and led to contract retention of 87% against an industry average of 40% Source: NCP Case Study 31 Euro RSCG worked with the Standard to engage in a major business refocus programme to respond to new market conditions by investing heavily in the skills and competences needed to move into higher value and more creative services of recruitment advertising within the internet arena. The reengineering of the business and skills has resulted in substantial increases in value added sales. Source: Euro RSCG Case Study.

32 How IIP Achieves Business Benefits F. Maintaining IIP status keeps challenging and reaping rewards E. Improved competitive edge, reputation And performance A. Embeds Strong Change culture and leadership to realise ambitions Proven bottom line impact B. Reduces cost and wastage through focussing people development on realising ambitions D. Increases commitment, effort and results by matching people development to realise ambitions 32 C. Delivers improved skill levels and flexibilities to realise ambitions

33 Maintaining IIP Status Keeps Challenging and Reaping Rewards The IIP framework has to be embedded for the long term Exceptionally high intention to renew (95%) amongst IIP recognised organisations (Source: E ) Majority of Captains of Industry with IIP status endorse IIP continuously challenges organisations to improve (Source: H) There can be downsides with not renewing De-recognised companies in public sector experienced some negative effects in recruitment, retention, quality of products and services, business growth (Source: J) IIP Case Studies validate that long term commitment leads to better competitiveness and performance vital for survival and growth in uncertain times (Source: M) 33

34 Maintaining IIP Status Keeps Challenging and Reaping Rewards We are committed to IIP because people are at the heart of everything that we do. Our success depends on our people. If the Tesco team find what we do rewarding we gain their emotional loyalty and they are more likely to go the extra mile to help customers. Customer satisfaction levels have improved as a result Source: Tesco Customer Service Centre Case Study 34

35 The Value of IIP in Times of Change F. Maintaining IIP status keeps challenging and reaping rewards E. Improved competitive edge, reputation And performance A. Embeds Strong Change culture and leadership to realise ambitions Proven bottom line impact B. Reduces cost and wastage through focussing people development on realising ambitions D. Increases commitment, effort and results by matching people development to realise ambitions 35 C. Delivers improved skill levels and flexibilities to realise ambitions

36 Questions & discussion Next Actions

37 Research Considerations

38 Existing Research Considerations Explore long term business benefits/case studies to prevent organisations walking away from Standard Include more key decision makers in samples wherever possible e.g. MDs, FDs as well as HR Add more questions on Captains of Industry Study Analyse by key stakeholder groups Potentials Newly Recognised Long term Recognised Lapsed 38

39 New Research Considerations Qualitative research to uncover deep motivational triggers to encourage IIP uptake and retention Aspirations, needs, behaviour in times of change Investigate Potentials, Committed Waverers, 1 st time Recognised Waverers, long term Recognised, Lapsed Groups and face to face in-depth interviews with range of decision makers e.g. HR, MDs etc Use specialist in qualitative research Explore IIP communications with target audiences Include Expert Interviews to provide added insight 39

40 Appendix A: Documents Reviewed

41 Bibliography Title Source Date A: IIP 2006/7 Company Report and 2008 Take First Step to Business Success IIP brochure IIPUK 2006/7/8 B: Performance Tracking Study (October 2007) Ipsos MORI 2007 C: Evaluation of the Revised Investors in People Standard IFF Research Ltd 2007 D: Customer Journey Research (Oct 2006) Response Consulting Ltd 2006 E: Membership Services Survey (June 2006) Response Consulting Ltd 2006 F: Impact of IIP and HR Policies on Business Performance. Bourne, Franco-Santos, Pavlov, Lucianetti Cranfield School of Man 2008 G: People and the Bottom Line P Tamkin, M Cowling, W Hunt IES 2008 H: Captains of Industry Survey 2007 Ipsos MORI 2007 I: Investors in People Perceptions Research (February 2007) Gfk Consumer 2007 J: The Impact of Investors in People in the Public Sector PACEC 2006 K: Skills for Productivity ; Can the UK Deliver? EEF (Manufacturers Association) 2006 L: Employer Segmentation Study (July 2007) COI 2007 M: Case Studies IIP Accredited Organisations IIP UK 2008 N: Accreditation Data: IIPUK IIPUK 2008 O: IIP Business Superbrand Case Study Superbrand UK 2007 P: Small Firms Initiative June 2005 York Consulting 2005 Q: IIPUK Remit and Aims IIPUK 2008 R: Review of Skills Recommendations February 2006 Lord Leitch s Report 2006 S: Innovation Report Department of Trade & Industry 2007 T: Guardian article Investment in Training is vital for Survival Chartered Institute of Personnel and Development April 2008 U: IIP New Choices Framework: Managing Change IIPUK 2008

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