It's a great deal all round

Around 100,000 employees in the city - more than seven million in the UK - are working for firms which have or are aiming for IIP standards, a framework developed in the early 1990s in a bid to arrest British industry's slide down world competitiveness rankings.

Studies had shown that Britain's most successful companies had a number of common features, most notably focused employee development designed to satisfy the needs of an ambitious business strategy.

While a great deal has been achieved since then, there is still a long way to go to attract the interest and harness the untapped potential of hundreds of thousands of firms across the country.

A major obstacle is the common misconception that IIP is simply another workforce training initiative. Jillian Moffat, Glasgow Development Agency's IIP manager, cringes when she reads newspaper articles reinforcing that theme. She knows the tired executive is likely to glance at the first few sentences, and then turn the page. Another potential customer lost to IIP, at least for the time being.

''Investors is more than people realise until they become involved,'' she says. ''Then they are sold on it. It is intended to improve business performance and secure competitive advantage by encouraging the continuous development of people.

''It is a flexible framework which is developed according to each company's needs. But you have to get in the door before you can get the message across.''

The success of companies who have ''got the message'' represents IIP's best marketing tool. Studies by the Hambleden Group show that companies which include developing their employee skill base in line with strict business objectives are achieving profit levels of up to 734% per employee.

Glasgow based IT company Prosys found that the structured methodology it was able to put in place pulled all the strands of the business together, and gave staff clarification and improved understanding of the objectives of the business. In real terms the company has grown at an average annual rate of 22%, and rising profitability has seen targets exceeded annually.

Esteem Ltd, the information management consultancy, has increased turnover every year since introducing IIP in 1992, and while staff numbers have grown from four to 13, the training cost has fallen from 5% to 2% of turnover. That illustrates the experience of many IIP organisations.

Focusing on the development needs of staff need not be more expensive. More economical and beneficial methods of delivery balance out initial costs.

A bonus is that the new culture of staff involvement results in greater job satisfaction. People stay with the company, staff turnover is reduced and induction and training costs of new employees, which can be up to #1200 each, falls significantly.

Moffat states: ''Tourism is a sector in which staff turnover is a big problem. The companies who committed to IIP have found that they enjoyed marked benefits in this area.''

''If there is an effective people development structure and staff feel part of the business plan, there is motivation. People want to go to work, they smile at customers, and the bottom line in the profit column demonstrates that more eloquently than anything else.''

For instance, since committing to IIP, the Glasgow Hilton has seen staff turnover halved.

The IIP philosophy has been proven in Glasgow in all types and sizes of firms: from a two-person firm to one with 9500 workers. Every sector from legal firms and GPs through to electronics and heavy engineering is involved. Charity and voluntary organisations are also benefiting.

In Glasgow around 120 firms are recognised IIP and another 450 are committed to achieving the right to use the IIP garland on their stationery - generally regarded as a marketing advantage. The programme has even saved one firm from closure.

Each firm which commits to IIP has an adviser, who can help in many ways - from an audit of current business practices through to identifying gaps in the structure and designing the firm's own people development plan.

The resources of the GDA can be used to help a company in trouble. That is what happened with a small engineering company which was within two months of folding. Six months later it was making profits.

Much better, though, to invest in the GDA and IIP before the company is in trouble.

''Companies with less than 50 employees probably need us more than most,'' explains Moffat. ''They are capable of expansion and IIP can provide the infrastructures to enable development.

''We also have a lot of lifestyle businesses in Scotland, where the owner has built up a firm, it is doing nicely and he or she is comfortable with it. We can show them the potential for growth - perhaps for exporting. Many are simply not aware of the possibilities.''

Elaine Sneddon, GDA marketing advisor for Investors, says the IIP team runs a rolling programme of workshops covering every aspect of business performance. They also organise quarterly ''network'' group meetings with attendances rising from 20 to 200 in two and half years.

The meetings have encouraged cross-fertilisation of ideas, with other small networks of people developing to discuss best practice. Other IIP deliverers have been monitoring the success of the strategy.

Both the previous and current governments supported the IIP campaign - as testament to its perceived importance to the national economic well-being. Two years ago additional government resources were poured into Investors to boost IIP staff in Glasgow from three to nine. In that time the number of companies they are assisting has doubled.

The Glasgow target is to achieve 600 recognised companies by the year 2000. Moffat and Sneddon believe they can surpass that - despite misconceptions which make it ''quite a hard sell'' until companies realise the business benefits.