🦜 PerchPulse - The USA Market Update July 2023 🦜

A warm welcome to the July issue of PerchPeek’s US Market Monthly update!

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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.

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A fly-by summary

●     The median rent in the US has fallen YoY for the first time in three years, but prices remain 25% above their 2019 levels - how to help support employees looking to rent

●     151,000 US-based tech professionals laid off so far in 2023, yet H1-B visa applications are up 61% on last year - latest stats and insights for Talent Acquisition leaders

●     US Supreme court blocks plans to relieve student loan repayments for millions of Americans - how this will impact employees and how best to support them

●     PerchPeek’s guide to US summer camps for children, to share with relocating employees to help their kids settle into their surroundings and make new friends!

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Home-finding: US median rent has fallen YoY for the first time in years - key stats to share with relocating employees

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There’s positive news on the horizon: after several years of crazy rental cost increases, prices are finally starting to decline. Here’s PerchPeek’s rundown of the key updates that impact relocating employees and HR leaders, and what could happen next for the US rental market.

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May 2023 stats at a glance

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●     The US median rent in May 2023 fell -0.5% YoY according to a Realtor.com report

●     This is the first annual rent decline in at least three years

●     The national median asking rent in May 2023 was $1,739

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How does this compare to the last few years?

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● Rental prices remain nearly 25% higher than in 2019

●     Following a wave of low ‘pandemic pricing’ in 2020, rents started to soar in 2021 and into mid-2022 as people returned to urban centres for work and school

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How does this vary by area?

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●     The West and the South saw YoY rent declines in May of -3% and -0.7%, respectively, whereas the Midwest and Northeast are still seeing rents increase

●     Metro areas with the largest YoY rent increases: Columbus, Ohio (+9.3%), St. Louis, Missouri (+7.7%); and Cincinnati, Ohio (7.7%)

●     Metro areas with the largest YoY rent decreases: Las Vegas (-6%); the Riverside and San Bernardino area in California (-5.9%), and Phoenix, Arizona (-5.7%)

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What’s likely to happen next?

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Rents are expected to continue to decline through the rest of 2023 and into 2024. An increase in property supply is expected, thanks to high levels of construction activity currently in progress.

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PerchPeek insights

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In major metro areas all over the US, rental prices have soared over the last few years so the knowledge that these costs are finally starting to come down is welcome news. This trend, in combination with slowing inflation, means that the pressure being felt by HR teams for salary increases may start to ease as the trend in cost of living returns to a more manageable level.

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Yet when it comes to supporting relocating employees looking for homes, it’s important to note that falling prices don’t fix the property supply and demand issue. Indeed, there may be even more competition for more reasonably priced apartments!

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To give employees the best chance of competing in this market and securing a home, it’s vital to equip them with proper support and guidance, such as advice on the best property portals, tips for standing out from the crowd at viewings, and documents to prepare in advance.

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Talent strategy: Mass tech layoffs may prove a big 2023 opportunity for international talent leaders struggling with H1-B visa restrictions

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The landscape of the US tech industry has witnessed significant shifts in 2023 - mass layoffs are continuing across the sector, yet there has been a huge surge in H1-B visa applications. The huge number of tech professionals unfortunately laid off and who will now be looking for work, coupled with the clear desire for foreign nationals to enter the US, means there are big opportunities for HR and People leaders dealing with international talent management.

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Mass layoffs in the tech sector continue in the US (and worldwide), with over 151,000 workers in US-based tech companies having lost their jobs so far in 2023, according to Crunchbase.

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It’s a huge increase from the 140,000 jobs cut in 2022, as these businesses confronted soaring inflation and a tumultuous stock market, not helped by a culture of over-hiring and over-valuing.

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2023 rundown (source: Crunchbase):

●     Amazon - 16,000 roles

●     Alphabet - 12,000 roles

●     Microsoft - 10,158 roles

●     Meta - 10,000 roles

●     Ericsson - 8,500 roles

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Despite these huge volumes of employees unfortunately laid off, of whom many will be those from abroad on working visas, we’re seeing the number of H1-B visa applications soar!

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US employers generally sponsor ‘highly skilled foreign professionals’ for H1-B visas, which are issued on a lottery basis and allow holders to work for US-based companies for an initial three-year period. Tech-related occupations account for up to 70% of H1-B visas issued.

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H1-B visa lottery - quick facts

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●     The number of H1-B visas issued each year is capped at 65,000, with an additional 20,000 available to graduates of US master’s degree programmes

●     780,884 registrations for H1-B visas were submitted for the fiscal year 2024 - meaning just 8.3% of applicants will have been successful

●     The number of 2024 applications jumped 61% from the previous year, which itself saw a 57% increase from 2022

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Key takeaways for People teams and Talent Acquisition leaders

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●     While this is a delicate situation, it’s a good opportunity to fill open roles by targeting tech professionals who’ve been laid off, especially those from abroad on an H1-B visa or work permit - they’ll need to find work to remain in the United States.

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●     Given the difficulties in obtaining H1-B visas for new talent, it’s a good idea to stay close to which big brands and competitor companies are making layoffs or on the lookout for new hires, as it could pose possible opportunities or risks depending on the space and geographic locations in which your company operates.

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Talent strategy: Plans to cancel student debt blocked by Supreme Court - impact for employee wellbeing and future international talent strategy

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The recent US Supreme Court decision to block plans to relieve student debt repayments for millions of Americans has huge implications for employees. Here we take a look at the details, and what this ruling could mean for HR and Talent Acquisition leaders in terms of employee financial wellbeing, talent retention strategies and future talent recruitment.

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Key facts

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●     The Supreme Court has blocked Joe Biden’s plan to forgive a proportion of 40 million Americans’ student loans, for up to $20k per person and totalling around $430 billion

●     The current pause on student loan repayments will come to an end soon; loans will start to accrue interest again on 1st September and next payments will be due in October

●     The average federal student loan debt is $37,338 per borrower (EducationData.org)

●     20 years after entering school, half of the student borrowers still owe $20,000 each on outstanding loan balances

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PerchPeek insights

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This is a massive blow to the millions of Americans who were expecting the cancellation of their student debts that in reality, many will never be able to pay off fully in their lifetime.

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It’ll now be super important to be mindful of the struggles that employees will be facing, and put in place support measures where possible (see our tips below). This will help hugely with employee wellbeing, and also increase the likelihood of staff retention.

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As People and Talent Acquisition leaders, it’s also well worth considering the possible future implications of this ruling. One thing it’s done is bring into focus the sheer expense of higher education in the US, compared to many other countries - it may discourage young people from attending, both domestically and from overseas. In turn, this would have a longer term impact on the local talent pool, which would need to be taken into account for recruitment strategies.

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How to support employees struggling with student debt

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●   Provide employees with information on managing student debt, budgeting, and financial literacy through workshops, webinars, or access to educational materials

●   Consider implementing employer-sponsored loan repayment programs or partnerships with financial institutions offering refinancing options or debt management tools

●   Look into offering flexible compensation packages that allocate funds towards student loan repayment, additional retirement savings, or tuition reimbursement.

●   Offer employee assistance programs (EAPs) with resources or counselling services focused on financial wellness and debt management

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Support your talent: Help employees with families get settled in with PerchPeek’s guide to kids’ summer camps!

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Summer’s here, and as schools close their doors for the duration, we wanted to explore the wonderful world of US summer camps! These have long been a fun way to keep children entertained over the summer months, and for families relocating with children, it can be an excellent solution for helping the kids settle in and forge new friendships.

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Here’s PerchPeek’s guide to summer camps, to share with families relocating to the US!

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●     Camps are available for various age groups, from preschoolers to teenagers, providing opportunities for children to make new friends, develop social skills, and build confidence

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●     Camps offer a wide range of price points to accommodate different budgets. Some offer financial aid, scholarships or discounts for families with limited financial resources

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●     They’re run by experienced, trained staff (counselors) who ensure the safety, wellbeing and engagement of the kids and provide regular updates to parents or guardians

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●     Sleepaway camps provide accommodation, while other camps are daytime-only; for both options, durations can range from a few days to several weeks over July and August

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●     Camps cater to many diverse interests: traditional camps focus on outdoor activities like hiking, swimming, and campfires, fostering a love for nature and building resilience

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●     Specialty camps operate for specific religions and for children with special needs, and others focus on areas such as arts, sports, science, technology, or adventure, allowing children to pursue their passions with like-minded new friends!

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●     Others offer educational programmes, combining fun and learning to prevent academic regression during the summer break - potentially a good option for kids new to the US

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When relocating to a new country, it’s easy for employees and in particular, their families, to start to feel isolated and lonely. As this is a major cause for failed relocations, it’s so important for HR and People Leaders to support their relocating employees to get settled in well and when it comes to those with families, to share options for helping the kids have fun and make friends.

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To point employees in the right direction to find out more about their options, a great place to start is American Summer Camps - this organisation provides summer camp recommendations to international families looking for the right summer camp for their child.

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We hope you enjoyed this month’s update!

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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.

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Thanks for reading, and see you next month!

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