Workers are quitting their jobs at a record rate, and that could mean companies have to pay higher wages to keep current employees. A survey, from FlexJobs and Mental Health America (MHA) reported that 75% of workers have experienced burnout, and 40% of those polled said it was a direct result of the coronavirus pandemic.

Why are employees leaving?

Almost 4 million people gave up their jobs in April, according to the Bureau of Labor, an unprecedented number in the two decades that they have tracked this data. In April, the share of U.S. workers leaving jobs was 2.7%, a jump from 1.6% a year earlier to the highest level since 2000. There are many reasons why people quit; some are looking for a better salary, others want to continue working from home after the pandemic, and some are simply dissatisfied with their work culture.

What firms are doing?

Given the tight labor market, many workers are confident that they will find a better job. Resignations mean that companies have to pay to keep a good workforce. Companies from Bank of America to Walmart have already announced that they will raise wages. If these numbers continue, experts say wages will rise 3.5 percent this year. This is the fastest increase in 13 years. Hybrid work environments are also being pitched to incentivize employees to stay. In extreme scenarios, some firms have simply shut down their office, making work from home (or remote) permanent. 

New Business genesis?

Not everyone is just looking for a higher salary. Another big surge that experts are seeing is the birth of new businesses. New firm inceptions are at an all-time high. These budding new tycoons report that the appeal of being your own boss outweighs concerns about stability.

What should firm do?

Firms should continue to closely monitor their workforce. Losing an employee is not simply about resource attrition, rather all the tacit knowledge that goes with it. Leverage pulse surveys as a lever to understand the needs of the workforce. Don't force a decision on your employees, rather share the "Why" behind it as well. Most employees will make the best call, once the feel they are are part of the conversation.