For Relocators
Understanding Relocation Costs: A Comprehensive Guide
November 28, 2024
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A warm welcome to the May issue of PerchPeek’s UK Market Monthly update!
Here’s where you’ll find the hottest updates around employee relocation and international talent strategy, insights from our experts on housing and cost-of-living news affecting your staff, the latest trends in global mobility, and tips and tricks on ways to support your teams.
A fly-by summary
● A new survey finds the UK is one of the most accepting countries for foreign workers, as just 29% of people support prioritising UK citizens for jobs - down from 65% in 2009
● More and more landlords are retiring and selling up, and not being replaced as younger people struggle to invest in property, putting more pressure on on the rental market
● 700,000 UK households missed rent or mortgage payments last month, new graduates’ starting salary struggles, and other effects of the ongoing cost of living crisis
● PerchPeek’s conference insights, including 3 HR megatrends for 2023: increasing employee anxiety, need for organisational flexibility, and Gen X taking over the C-Suite
According to a survey of 24 nations, the UK is now one of the most accepting countries for workers from abroad, in what the authors describe as “an extraordinary shift” in attitude.
When asked if employers should prioritise citizens of this country over immigrants when jobs are scarce, here’s how people in the UK responded:
● In 2009, 65% of respondents agreed that UK citizens should be prioritised
● When asked the same question in 2022, just 29% of respondents agreed
Graphic source: The Guardian
Out of the 24 countries surveyed, only Germany and Sweden saw a lower percentage than the UK of respondents who supported prioritising native-born residents over immigrants in 2022, showing that their attitudes are similarly accepting of economic migration.
Some countries however saw an increase in support from 2009 to 2022 for prioritising native citizens over workers from other countries, including China, Australia, Italy and France.
The UK also ranked fourth out of the 24 countries when it came to the attitude that immigrants have a very or quite good impact on the country’s development, higher than countries including the US, Germany, Norway and Sweden.
PerchPeek insights
These findings on increasingly positive attitudes to economic migration in the UK strengthen the argument for recruiting from abroad to fill the country’s 1.1 million job vacancies.
Along with the news from our last issue that the UK has rapidly climbed up the OECD ‘talent attractiveness’ list of countries that are most appealing to highly skilled workers, this data will help make a great case for talent acquisition leaders looking to attract overseas talent.
It’ll also be helpful to be armed with this knowledge around attitudes to immigrant workers when it comes to supporting employees relocating to the UK. This new data supports the notion that British people have a welcoming attitude to newcomers and see them as an asset to economic growth. This should help apprehensive movers feel way more confident about their move!
Many private landlords are retiring and selling their properties, taking them out of the rental market. They’re also not being replaced as many younger people can’t afford to invest in buy-to-let properties, meaning a dwindling supply of rental properties versus very high demand.
Key stats on retiring landlords (based on Hamptons Estate Agents and ONS data)
● Landlords sold 35,000 more properties than they bought across 2022
● Around 140,000 people who purchased properties in the 1990s to rent them out sold them in 2022 to fund their retirement
● About 96,000 landlords will turn 65 each coming year across Great Britain, in addition to the 924,000 who were already over this age
● The number of landlords retiring annually doubled between 2010 and 2022
Why are landlords selling up?
● Reaching retirement age - looking for a lump sum to fund their retirement
● Tax changes - reductions in tax relief on buy-to-let mortgages
● Stamp duty surcharge (+3%) on purchasing additional properties
● Higher mortgage payments due to soaring interest rates - average +£175 per month
● More regulations on tenants’ rights forthcoming, including banning ‘no-fault’ evictions
In short, these changes mean that renting out a second property is no longer as lucrative as it once was, and buy-to-let is an increasingly unappealing proposition as an income stream.
Instead, these properties are being placed on the sales market. Of course, it’s more difficult to purchase property at the moment (due to high interest rates making it harder to get a mortgage) but in any case, they’re being removed from the rental stock, exacerbating the supply issue.
PerchPeek advice for People Leaders
● Make sure to manage home-hunting employees’ expectations from the outset, encourage resilience and offer an empathetic ear when they raise concerns!
● Set up groups for relocating employees to buddy up to find properties, and share tips on neighbourhoods or developments where renting may be easier
● Make sure employees have a sufficient relocation package to let them stay in temporary accommodation for at least 2-3 months
● Arm them with the tools and knowledge on how to make a great impression at viewings!
To illustrate the effects of the ongoing cost of living crisis, we put the spotlight on the impact it’s having across different groups in various circumstances: homeowners or renters (effectively comprising the majority of UK residents), new graduates and small businesses.
700,000 UK households missed rent or mortgage payments last month
According to the consumer body Which?, around 700,000 UK households missed their monthly rent or mortgage payments in April 2023. This figure was “particularly high” for tenants, affecting about one in 20 renters surveyed. What’s more, an estimated 59% of households made at least one “adjustment” to cover essential spending, up from 35% just two years ago.
Starting salaries for graduates don’t cut it versus cost of living crisis
With 800,000 young people completing higher education in the UK each year, most of whom look to enter the workforce, it’s throwing into sharp relief that the average graduate salary of just under £24,300 is insufficient in light of the soaring cost of living, with inflation still over 10%.
UK small businesses being ‘held back’ by cost of living crisis
The Federation of Small Businesses has warned that the cost of living squeeze is hampering economic growth. A record 92% of company bosses reported that their costs were higher Q1 2023 than the same period last year, and two in five reported a drop in sales at the start of 2023.
PerchPeek advice for People teams
These figures show clearly that the cost of living crisis continues to affect UK residents.
● For compensation teams, it’s crucial to review and update packages to ensure they’re realistic versus the high cost of living, both for new starters and existing employees.
● It’s also important to stay in-the-know on these trends and how they impact wider economic growth, and the potential effect on talent acquisition and retention efforts.
It’s been a super busy time for PerchPeek’s UK-based Marketing team, who flocked to London’s Centuro Global Expansion Conference and HR Technologies UK Conference in May 2023.
We had a ball making new connections with global mobility professionals and having the chance to chat with them about the biggest issues and trends affecting the industry, such as:
● Cost-cutting and having to do more with less
● Employee retention and upskilling/reskilling the workforce
● Mental health and wellbeing support
We also attended a super interesting seminar presented by HR technology company UKG, where they outlined the three megatrends impacting HR and People leaders in 2023:
1 - Employees are experiencing chronic anxiety
From the global pandemic to layoffs and the cost of living crisis, employees all over the world are experiencing anxiety about the future. According to Deloitte, 68% of employees say improving their wellbeing is more important than advancing their careers. HR teams must take this into account and prioritise supporting employees’ wellbeing, improving trust and safety.
2 - More adaptable organisational structures needed
It’s a turbulent time of mass layoffs at many big brands, yet there’s a critical shortage of highly skilled talent, estimated to reach 85 million by 2030 if current trends continue. UKG identifies visibility, control and plasticity (in other words, the ability to be moulded or altered) as the three things firms must prioritise to take the right actions and retain their existing workforce.
3 - Changing demographics of leadership
As time marches on, so-called Baby Boomers (born 1946-1964) are retiring from their executive positions and often being replaced by Generation X (born 1965-1980). While of course this is a generalisation, UKG pinpoints differences in the belief systems of the two groups, as well as what matters to them, and highlights the importance of DE&I and social responsibility for Gen X.
Many thanks to UKG for their valuable insights on the HR megatrends of 2023!
We hope you enjoyed this month’s update!
If you have any feedback, comments or questions about what's happening in your location, feel free to reach out via the form at the bottom of this page.
Thanks for reading, and see you next month!
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We hope you found this update insightful! We’d love to hear your thoughts.
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