Ruth
Spellman, chief executive of Investors in People, has strong views on HR’s
rightful place in a company’s pecking order. She also calls for a change in
company law to recognise good people management practices
The Investors in People standard has recovered from a shaky start this year
and is set to play a crucial role in the Government’s bid to drive up the UK’s
productivity.
The Government committed an additional £2.5m to the scheme in April, after
the number of employers receiving accreditation dropped by half over the first
four months of this year compared to the same period the previous year.
However, Ruth Spellman, chief executive of IIP, said the reduction of
employers achieving the standard had just been a blip. She said numbers are up
14 per cent so far compared with this time last year. Between January and
October 2002, 3,763 companies received accreditation bringing the total number
of employ- ers with IIP to almost 30,000.
£30m windfall
Spellman believes the standard is starting to become a mainstream part of
business and is helping HR measures such as effective training and development
gain prominence. "We have a critical mass of organisations doing the
standard, which means it has become part of business. This is a big culture
change for the HR community," she explained.
IIP is set to benefit from a £30m windfall in the Budget, designed to
promote the standard more effectively and drive up numbers even further.
Spellman stresses the standard is not a box-ticking exercise and plays a
role in ongoing improvements in working practices. "Every company going
through the standard has to evaluate the business benefits. If it wasn’t
improving productivity, firms would leave – yet we have a 90 per cent retention
rate."
Spellman believes IIP can help erode the UK’s long-hours culture, which she
identifies as one of the reasons for the UK’s poor productivity. "We work
longer hours than any other nation, and if that was the answer, we would be the
most productive country in Europe, but we’re not. It’s counter productive when
you look at stress and safety."
Spellman believes the answer is for companies to work smarter and drive up
output per hour, which would require a major shift in attitude by managers.
"I think those economies that have made an investment in good people
management practices have the best productivity," she added.
"At appraisals, managers should be looking at what staff have done –
not if they were here on Sunday afternoon. We need to measure the output not
the input," Spellman said.
She criticises the DTI’s appointment of US guru Michael Porter to tackle the
problem of low productivity, claiming that UK plc should instead focus on
developing junior managers more effectively. "It’s a bit of a vote of no
confidence in our managers. We have to learn from other countries but can’t go
running overseas every time we have a problem," she said.
The IIP chief also calls for a change in company law that would require
firms to present HR data highlighting people management measures such as
diversity figures and training, along with the usual financial details each
year. "If staff are the biggest asset, why aren’t they on the balance
sheet? I believe it should be reported and it would be motivational for
employees to see this year-on-year."
For this to work effectively, HR would have to establish a more
comprehensive set of measures that would quantify everything it does as a
function, she added.
Bogged down by details
Spellman also urges HR professionals to become increasingly
business-oriented and less focused on the more transactional aspects of the
function. She said HR had become bogged down in detail and was failing to
recognise its wider role. The IIP was a way of drawing together best practice
in HR, making it central to the business plan and putting communication at the
very heart of an organisation.
"The more HR is a self-serving function on the fringe of
decision-making, the more it’s got a long-term problem. HR needs to be more
integrated and IIP is a good tool for making this happen," she said.
Spellman suggests that because managing people is now such an intrinsic part
of running business, it is an organisation’s board rather than HR that is the
best driver for IIP. "I would like to see HR professionals not just
getting on the board but being CEOs. We need CEOs who are good people managers
and getting the best out of the workforce," she said.
"It’s not about HR, it’s about companies embracing what HR is all
about. Many CEOs have sent us straight to HR, but really this is a business
development tool. In a way, HR managers are the least of our worries – the real
issue is about getting onto the corporate agenda. It’s a very tricky process
getting the whole organisation to wake up to this," she added.
Spellman points out that British business has rarely stuck to a programme of
sustained people development for any period of time, and said this must occur
to integrate HR. "The most successful businesses I see have HR as part of
the company. They don’t necessarily need a separate HR function," she
explained.
"The UK hasn’t done any real development for more than five minutes and
as a result we have failed to embed anything. That’s why IIP represents
something important," she said.
Spellman says Investors in People has moved with the times and reduced the
bureaucracy involved in achieving the standard so that an application for IIP
now involves no paperwork.
IIP is also launching ‘standalone’ modules so companies can improve people
management without doing the whole standard. It’s also adding additional areas
to the standard in 2003, focusing on work-life balance, management and
leadership.
"The accreditation is the icing on the cake – it is the journey that’s
valuable for the business. It is all about boiling down what’s important for
everyone in the business and how that is communicated," said Spellman.
Permanent commitment
IIP is more proactive than many people realise. It investigates complaints
from employees, and has the power to suspend or derecognise IIP companies if
standards slip after accreditation. "You need to make a permanent
commitment to your staff and their development if you’re really going to be
competitive," said Spellman.
Employees now expect to be treated fairly at work as a result of the
development of employment legislation under the Labour Government. They have
become much more savvy.
Spellman believes that as employer branding becomes increasingly crucial in
the battle to attract both customers and employees, IIP will be seen as more
and more relevant. She said: "The success of HR is the extent to which it
is embedded in an organisation. Organisations may look different in the future
and perhaps these HR measures will become so ingrained they won’t need HR
managers."
Feedback from the profession
We asked for your thoughts on
Investors in People and here’s a selection of the responses:
"The majority of personnel see
IIP as a tool for improving communication, development and formalising certain
practices."
Clare Wheeler, HR manager, May Courier International
"It seems well-run companies
don’t need gimmicks. Surely if a company is not well run, it is because the HR
department has allowed the recruitment of staff without relevant skillsets for
the job."
Charlotte, via e-mail
"We were recognised by IIP in
1994, and we tripled our profits partly through use of the standard in the
following five years."
Alan Jones, chief executive, TNT
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"I think we found the standards
a bit bureaucratic and paper-heavy but were pleased to have done it and pleased
with the results."
Bill Gregory, head of HR services, Cleanaway
"Since achieving the IIP
standard, sales have increased by 100 per cent, profits by 250 per cent and
staff retention is at an all-time high."
Gerry Farrelly, director of training, Farrelly Facilities and Engineering
