Poor skills can cost businesses £185,000 a year and those that do not invest in their staff are not equipped to fight their way out of the economic downturn, according to recent research.

The research, which was carried out on behalf of Investors in People, the organisation that works with companies to improve their productivity, found that companies with around 50 employees could be wasting £185,000 per annum by not developing their staff.

Trish Fraser, Managing Director of Quality South East, which is the Investors in People Centre for the region, said: “Businesses should be doing all they can to make sure that their staff are well equipped to battle the current credit crunch. Developing skilled staff that are ready to take on new challenges and contribute fresh ideas is vital for organisations to grow sustainably, innovate and fight their way out of a downturn.”

Investors in People is a straightforward framework for delivering business improvement. There are more than 4,000 accredited companies across the South East that have met the requirements of the Standard.

Research shows that organisations of any type and size that adopt a comprehensive approach to people development perform better than those without, indicated by higher gross profits per employee, higher profit margins and higher productivity. Companies that have achieved the Investors in People Standard also have higher levels of trust, co-operation and commitment than their competitors.

“These performance indicators correlate with improved financial performance, so it really does make sense to invest in your staff,” added Trish Fraser. “Just a ten per cent increase in investment secures an increase in gross profit per employee of more than £1,500 a year.”

The research found that 95% of people believe that the Investors in People Standard links skills and people development to organisational strategy, with 75% agreeing that the Standard helped to raise employee skill levels.

Trish Fraser continued: “Times of great change will inevitably create opportunities for those organisations that are prepared to adapt and be flexible; investing in staff does not have to involve a huge financial cost and it is not something that should be dismissed when times are hard.

“Developing your staff gives you a competitive edge; something that will become increasingly important in an uncertain economic climate. A more skilled and knowledgeable workforce that takes pride in what they do improves motivation and effort. This can increase staff retention rates, discourage absenteeism and reduce recruitment costs.”

Organisations can now find out if they are performing as effectively as possible by completing a free online health check, a 15 minute survey which can be accessed via www.investorsinpeople.co.uk/interactive

To find out more about the benefits of Investors in People visit www.qse.org.uk, www.investorsinpeople.co.uk or call 01329 822077.