Research for Britain’s City and Guilds Institute suggests that salary plays a relatively unimportant role in the retention of employees.

Other factors are more likely to influence whether they stay or go – how much they enjoy the work they do, how well they get on with colleagues, whether they have the right balance between work and home life, etc.

At first sight, it is all too easy to dismiss this as yet another piece of propaganda for the soft touchy-feely school of management.

However, on reflection, the canny entrepreneur may be missing a trick if he does not think carefully about this.

Retention of decent subordinates is an even bigger problem for entrepreneurs than recruiting them in the first place. We cannot offer the huge salary packages, expense accounts, and international travel that come with employment by a big multinational.

So we need to be imaginative in finding attractions in working for smaller businesses that sidestep the need to compete on purely financial grounds.

For example, big businesses’ employees tend to specialise, but those seeking variety in their work are more likely to find it in a small enterprise. There is also the camaraderie of the tight-knit team which is rarely found in large organisations. Moreover, entrepreneurs are human beings and so more likely to be flexible than bureaucracies when it comes to working arrangements.

The entrepreneur’s competitive advantage here is that he should know more about what his staff really want than any huge “human resources” department. Just buying a coffee machine may be more effective than thousands in increased salaries.