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To me cost of living affects everyone the same way. At the end of the day, all the employees at the big end of town needs to pay for the same things you do – bread, electricity, water, housing etc.

If you are an employee, you expect to take a pay cut going from a big business to a small business and on average, the reason why you are going to work for a small business is not money related. You want to be closer to home, lessen travel time, work part time, get out of the corporate culture etc. So I don’t see any dramatic change in the level or the quality of employees leaving the big business system.

As for how to compete, same way as I usually do – personal service, personal relationships and ease of doing business. Attaching employees the same way as I always have – offer real work/life balance and the fact that your boss actually care about your wellbeing.