Business Essentials: 'Where's the therapy when workers walk out the door?'

The main problem has been hanging on to staff. And given how much training his beauty therapists need, he wants to know if there is a way of protecting his future investments in his employees.

"We opened our doors in July 2003," says Mr Jones, who runs the Eden Day Spa, based in the city's Guildhall shopping centre, with his wife Tracey. "We took over an old gym which you access from the mall itself and we offer everything from floatation therapy to waxing and from mother-to-be treatments to tanning."

The company took on seven members of staff prior to opening: five beauty therapists, a nail technician and a receptionist. "All the therapists had been trained already, but because we specialise in Elemis and Dermalogica [respectively, an aromatherapy range and a skin- and body-care system], we also needed to get them trained up on these specific products and their techniques."

Eden Day Spa paid for the therapists to train in London, costing an average of £2,500 per person. But within a year, half of them had left the company.

"We had to let our receptionist go due to cashflow," explains Mr Jones. "She was simply the easiest role to live without. But unbeknown to us, the receptionist was like a 'mummy figure' and received a great deal of loyalty from the beauty therapists. Three of them left with her. They told us: 'We are not going to work for you if you can drop someone just like that.' "

Mr Jones told his workers that this was a business decision and nothing personal, but to no avail. "We were down to half our staff and it was awful. It takes time to take on new staff and train them up. You can imagine the effect on our turnover, which in turn has a knock-on effect on rental payments and other finances. It even got to the point where the bailiffs came in. Morale was affected too."

Eventually, he and his wife caught up, but Mr Jones admits the business is still feeling the ripples a year later. "My concern now is that we hang on to current staff. While I have no reason to believe they will go, it's obviously something that I want to be sure of."

The nature of the industry itself gives him another reason to be worried, for beauty workers don't tend to be ruled by loyalty. "It's very easy for people to ride on the back of a new organisation with a view to moving on quickly - whether to set up their own business or go somewhere else," says Mr Jones. "We want to know how we can protect ourselves against this."

One initiative he has adopted is to include a training clause in the contract of employment. "Now, if beauty therapists leave within a year, they have to pay a certain percentage of all their training, plus associated costs. But there's still a risk. One member of staff left about a month ago to go abroad. She concluded: 'It's only a few hundred quid - I'll leave anyway.' "

In addition, Eden Day Spa pays London salaries and offers travel allowances, a pension scheme and good commissions on sales. "We certainly have no trouble attracting staff - they are always knocking on the door. But we want to make sure we can keep them."

WHAT THE EXPERTS SAY

Ruth Spellman, chief executive, Investors in People

"It is sometimes inevitable that staff have to be let go, but the way in which Mr Jones approaches redundancies must be re-examined if he is not going to undermine overall employee morale.

"I am concerned that he was unaware of his staff's feelings towards the receptionist. That would suggest he needs to become more attuned both to his employees' needs and the contribution they make to the working environment. If he succeeds in understanding his people and allows them to be more involved in the decision- making process, he will be rewarded with greater motivation and loyalty.

"Good wages and a pension are important, but it may be that his staff are looking for other benefits, such as flexible working hours. He needs to set up a system of regular consultation with them, so that they feel their opinions are being heard. They will then be less likely to leave and undermine his investment in their training."

Stephen Pegge, head of communications, Lloyds TSB Business

"Loyalty is about more than money; it's about motivating staff and making them feel valued enough to want to stay. It's worth investing in team bonding and building good working relationships. This could be in the shape of a fun day out or just regular social events after work.

"The clawback clause for training costs is a good idea, but maybe a bonus for long service after a year/three/five years would help. And if this was linked to performance - perhaps a profit-sharing deal - it could pay for itself.

"Mr Jones should ensure, too, that he offers career development and flexible working opportunities. By providing staff with personal development plans that reflect their individual ambitions, Eden Day Spa should also benefit by having a wider skills base, allowing for better succession planning.

"Mr Jones may then be able to delegate more and get some help with his managerial tasks, not least recruiting and inducting new staff."

Rebecca Clake, adviser, organisation and resourcing, the Chartered Institute of Personnel and Development (CIPD)

"Eden Day Spa isn't alone: recent CIPD research shows that seven in 10 UK organisations are experiencing retention difficulties. As consumer interest in pampering continues, therapists can easily find employment in salons, department stores, even with airlines - or decide to set up on their own.

"Mr Jones's people seem to have little idea of what makes his business profitable. One way to improve commitment will be to involve them in discussions about how and where he makes money, what his priorities are in terms of sales and promotions, and where he wants his business to be in a few years' time. He'll also benefit by drawing on the ideas of the people who deal with the customers.

"If he is already competitive on salary, he needs to review what is really important to his employees. What gets them out of bed in the morning? For example, a team-working culture and opportunities for progression could help increase loyalty and morale."