For Relocators
Understanding Relocation Costs: A Comprehensive Guide
November 28, 2024
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A warm welcome to the April issue of PerchPeek’s US 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
● New study shows a $100k salary is actually worth just $36k in New York City after adjusting for taxes and cost of living - plus, the cities where $100k is worth the most
● 87% of US employers are hiring employees from abroad right now; 94% would hire more if it weren’t for immigration barriers, and other key US immigration trends
● Cost of living update: the average cost of groceries rose by 11.4% in 2022 and may rise a further 8.6% in 2023 - how to help your employees economise on food
● Spotlight on Mountain View, CA, where the average rent for a 1-bed unit costs $3,485 - plus, PerchPeek’s recommendations for much cheaper alternative neighbourhoods
A six-figure salary certainly puts employees in the higher income bracket on paper, but in reality, there’s a massive difference in how far that’ll stretch, depending on where staff are living.
To see how much $100,000 is actually worth in different parts of the country, SmartAsset has released a study comparing the after-tax income in 76 of the largest U.S. cities and then adjusted those figures for the cost of living in each place.
Key findings
● $100k goes furthest in Memphis, Tennessee - Here the cost of living is almost 14% lower than the national average and a $100k salary is actually worth $86,444.
● Texas cities dominate the top 10 - Seven of the top 10 cities that come out on top are located in Texas, thanks to no state income tax and the low cost of living.
● Oklahoma City offers the lowest cost of living - Here the cost of living is just 83.2% of the national average, the lowest of the 76 cities analysed. $100k is really worth $84,498.
● $100k is worth just $35,791 in New York City - The double whammy of high taxes and high cost of living means $100k isn’t the windfall for New Yorkers that it may first appear!
The full rankings can be found on the SmartAsset website here.
This survey is super interesting reading for Compensation teams when it comes to reviewing current packages, and could certainly pave the way for location-related adjustments. It’s also of course crucial to take inflation and current cost of living trends into consideration to make sure that compensation and benefit packages remain competitive, especially in a tight labour market.
PerchPeek partners with Envoy Global, an immigration services provider, and we're thrilled to share the key findings from their US Immigration Trends Report 2023! The results are based on a survey of 500 HR professionals specialising in corporate immigration and global mobility.
Here’s PerchPeek’s snapshot of some of the most interesting findings:
While layoffs and hiring freezes are widespread and ongoing, it's interesting to see these challenges aren't quelling US employers’ appetites to hire skilled talent from abroad. Indeed, demand for foreign employees continues to rise, with immigration barriers the main issue.
To dig into more details, take a look at Envoy Global’s report in full by heading to their website!
Across most of the Western world, food prices have been soaring over the last several months, and in the US it’s been no different. The average prices of staples such as bread, flour and butter have increased by over 20% versus one year ago, and everyone’s feeling the pinch.
Key stats from the US Department of Agriculture:
● The overall average cost of groceries rose by 11.4% in 2022 versus the previous year
● This is the highest annual percentage change since 1974
● In the last two decades, average year-to-year food price inflation has been 2%
Grocery costs are expected to rise a further 8.6% in 2023. It’s also possible that recent severe flooding in California could push up food prices further, due to the catastrophic effect on crops and farming processes in the ‘leading agricultural state’.
Cost of living shock factor for newcomers from overseas
To help your teams through cost of living challenges, especially those newly arrived in the US, it’s important to manage their expectations around the cost of groceries and other essentials.
PerchPeek’s US experts point out that this is especially the case for newcomers from other parts of the world such as Europe and South Asia. The cost of living often comes as a shock to these movers, who are used to groceries being 20-30% cheaper than in their new US home!
PerchPeek top tips
Here’s how to help your relocating employees save money on food and other essentials:
PerchPeek’s top five low-cost grocery stores
● Aldi - nearly 2,300 locations across the country
● Lidl - 177 locations nationwide
● WinCo Foods (West Coast) - big-box store without membership fees
● Market Basket (New England) - 90 locations
● Food4Less (California, Illinois & Indiana) - 101 locations
Cost-saving tips and tricks
● Many supermarkets offer rewards programs that offer members exclusive discounts. It’s also possible to link credit cards to some of these programs, and earn extra rewards.
● Some savvy shoppers have ‘couponing’ down to an art form! Encourage employees to make use of coupons to make great savings on their favourite items.
● Wholesale clubs like Costco and Sam’s Club can help shoppers build up savings by buying in bulk - note that membership fees apply, and of course that this is a more suitable option for those living outside major cities.
● Shoppers may wish to try rebate apps like Ibotta and Rakuten that provide cash back for grocery purchases.
● Advise employees to buy produce currently in season, and check out the many budget meal recipes on sites like Allrecipes, Delish, Simply Recipes and Epicurious.
This month we're focusing on Mountain View, California, in the heart of Silicon Valley - home to Google and many more of the world’s largest tech companies. Here are the latest unit prices and trends, and other key updates for People leaders supporting relocating employees.
Mountain View rental market update
Key trends at a glance (source: Zumper.com):
● The average rent for a 1-bedroom unit in Mountain View is $3,485
● This is up nearly 40% YoY, while 2-beds are up 31% YoY
● 59% of Mountain View households are renters, and 41% own their properties
Breakdown by apartment type:
he 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.
PS - if you’d like next month’s PerchPeek USA Market update delivered start to your inbox, you can signup here:
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