The Investors in People scheme was launched in 1991 as the centrepiece of the Government’s strategy for promoting the business culture. Tony Blair and his new Labour acolytes have seized on it in their drive for the “democratised” workforce of a stakeholder society.

The most detailed research yet looking at 1,800 firms offers both good and bad news to Tories and Labour anxious to score points during the last conference season before the general election.

Jim Hillage, senior research fellow for the Institute of Employment Studies, says: “Investors in People is a successful initiative. Employers and employees like it and see benefits from it.

“It appears to spur employers to improve the way in which they manage their workforce and therefore their businesses, with consequent positive effects on workforce and business performance.”

The bad news is that successful uptake of IIP is failing to spur enough employers and staff to take initiatives such as national vocational qualifications, which are central to the Government’s national training and education targets.

Ministers are resigned to the fact that some targets cannot be met. They hope for 70 per cent of organisations with more than 200 staff in both the private and public sectors to be accredited with IIP by the year 2000. Some 35 per cent of groups with 50 to 100 should also qualify.

Continued heavy bureaucratic demands, high initial costs and the length of time taken to achieve the standards is a deterrent, particularly among smaller firms where employees are least likely to benefit from other sources of training.

But Jim Hillage warns: “The national target on investors will be hard to meet as there is limited interest among non-involved employers and the time taken to achieve recognition is increasing.”

The benefits from IIP are clear, the research shows. Companies pursuing it adopt a more systematic approach to training, which is focused on business needs. Communications with staff improve as they have a better understanding of the business. There is higher motivation among what is quickly a better-skilled workforce.

Achieving the IIP standards is not easy. An exacting audit of staff communications, training provided and efforts taken to motivate the workforce is carried out, whether in a private firm or public institution such as a school or college.

It is not the only player in the field. “Three-quarters of the employers who anticipated training benefits from IIP said they had achieved the improvements they had expected. However, two-thirds also said they could have achieved the same result by other means,” Mr Hillage said.

But the overriding conclusion was that while other means were available, IIP motivated the changes. And while small employers were least likely to take up the initiative, the research showed they were most likely to benefit fastest from improved performance.