For Relocators
Understanding Relocation Costs: A Comprehensive Guide
November 28, 2024
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A warm welcome to the June 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
● Executives at tech and manufacturing companies are calling for urgent immigration reform in order to address skills shortages and prevent roles being outsourced
● US inflation under 5% for first time in two years, down from peak 9.1% in June, meaning consumer prices of food and energy are rising more slowly - impact on employees
● Spotlight on NYC: rental costs have been steadily rising since March, with the average rent for a 1-bed unit at nearly $4,000 - how to support home-hunting employees
● PerchPeek’s guide to celebrating on the Fourth of July, to share with relocating employees - helping them settle in, have fun and connect with their local community!
We’ve been reporting on more and more news around US companies looking overseas for qualified talent to fill growing worker shortages (check out our last issue for key stats on this!)
Now, executives at numerous tech and manufacturing companies are calling for an urgent loosening of US immigration rules in order to tackle skills shortages, and redress the current trend of jobs being outsourced overseas due to difficulties bringing foreign talent to the country.
According to the Financial Times, tech companies including Intel and Samsung have written to Congress calling for immigration reform, including granting an exception for advanced STEM graduates from overseas so that they are not included in permanent residency quotas.
Key quotes
“We have to fix our high-skilled immigration system. Sending the most brilliant, foreign-born, US-educated talent to work somewhere else is just ludicrous.” VP Govt Relations, MediaTek
“Immigration reform is super, super important to the growth of our economy. I just encourage federal leadership to roll up their sleeves and move quickly.” - Commerce Secretary of Indiana
Facts and figures
● Highly skilled tech workers are in short supply - global management consultancy McKinsey estimates the US will be short of 300,000 engineers/tech workers by 2030
● The US received a record 781,000 applications last year for its H-1B visa lottery, which offers only 85,000 slots per year for university-educated foreign workers
Source: Financial Times
PerchPeek insights
There’s clearly a keen appetite from employers to recruit talent from abroad. In a recent survey, 94% of people said they would hire more foreign talent if there were fewer immigration barriers!
HR and People Leaders may wish to employ the services of a specialist immigration provider to help take the burden off their teams and speed up the process. It’s also important, when looking to attract the best overseas talent, to offer up a comprehensive relocation package that includes immigration support, and to manage expectations well when it comes to timelines.
Latest stats on inflation
● Consumer inflation in the US has fallen to 4.9% as of April, down from 5.0% in March
● This is the tenth consecutive month that price rises have slowed
● It’s the first time in two years that consumer inflation has been under 5%
● Inflation peaked in June 2022 at 9.1%, the highest level since 1981
What about food inflation?
● When focusing on the cost of food specifically, the trendline looks similar
● Food inflation has been steadily falling since its peak of 11.4% in August 2022
● As of April, US food inflation is at 7.7%, down from 8.5% in March
What does this mean for consumers?
Falling inflation doesn’t mean that actual consumer prices are falling. It means they’re still rising, but just not as fast as they were previously. According to economists at Wells Fargo:
“Slowing food inflation and normalising energy prices have offered consumers some relief from the most painful parts of the price surge seen over the past couple of years."
PerchPeek insights
It’s encouraging to see US inflation steadily falling after many months of dealing with the cost of living crisis, causing food and energy bills to soar and putting pressure on most US households.
In particular, when you compare US inflation to other key markets, it brings into focus just how much other countries - largely in Europe - are still grappling with inflated prices. For example:
● US inflation is at 4.9%, compared to 8.7% in the UK and 7.2% in Germany
● US food inflation is at 7.7%, compared to 19.0% in the UK and 16.8% in Germany
Having said that, the cost of living is still very inflated in the US, especially in major cities, and it’s important to note that grocery prices were relatively high to begin with. Relocating staff coming to the US from Europe are often shocked to find food is 20-30% more expensive!
For a host of tips around helping staff economise on food, check out PerchPeek’s guide here!
This month we’re shining our rental market spotlight on the Big Apple! Here are the latest unit prices and trends, and other key updates for People leaders supporting relocating employees.
New York City rental market update
Key trends at a glance (source: Zumper.com):
● The average rent for a 1-bedroom unit in NYC is $3,995 - up +8.1% YoY
● After a slight price dip in Feb/March, rent for 1- and 2-beds has been steadily rising
● 67% of NYC households are renters, and 33% own their properties
Breakdown by apartment type:
In the news
According to Forbes, New York City rentals are currently flying off the shelves:
“The NYC rental market has never moved quite like this before. Prices are as high as they have ever been, or higher. Options are in short supply. Hopeful tenants experience one frustration after another; the bolder ones offer more than the asking price just to get in the game.”
Bloomberg notes Manhattan, Brooklyn and northwest Queens as the neighbourhoods worst hit by price hikes (of between 8% and 15% YoY), with Astoria and Long Island City close behind.
PerchPeek insights
New York City is consistently one of the most competitive rental markets for home-hunting employees, but it’s worth noting that as we enter the summer months, it’s likely to be especially challenging to secure a place as this is when many people choose to make a move.
We’ve also seen prices rising steadily lately; while the average 1-bed unit cost $3,350 in March, it’s now up by $650. This again will make competition stronger, especially for cheaper properties; therefore it’s crucial to equip your relocating employees with enough budget for a stay in temporary accommodation of at least two months, to give them ample time to search.
Landlords have also flipped paying the broker fee onto the renter, and demand for properties was already very high, making things even more difficult for relocating employees.
What’s very striking is the price rise for 3-bed units, up a whopping 47.6% vs. last year to over $5,000! For employees moving with families, it’s worth helping them find alternative, cheaper locations further out, and to offer flexible working options and/or transport subsidies.
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 one of the major causes for failed relocations and overall employee dissatisfaction, it’s super important for HR and People Leaders to support their relocating employees to get settled in well and to get to know their local community.
One way for employees newly arrived from overseas to get to know US culture and meet new people is to get involved with local events and celebrations. And with the Fourth of July fast approaching, what better way to help foster some US spirit and support your teams?
Here’s PerchPeek’s guide to celebrating on the Fourth of July, to share with relocating staff!
● Independence Day is a federal holiday in the US that this year falls on a Tuesday. It’s likely that many employees may also take Monday as PTO, to make it a long weekend!
● This is the most celebrated US holiday in the calendar and is the time to showcase some American pride! Red, white and blue clothing and decorations are the order of the day.
● As many local employees will spend the day with family and friends, newly arrived staff may wish to buddy up and organise local gatherings to enjoy the festivities together!
● One of the best things relocating employees can do to build new connections is to hold a Fourth of July cookout - a feast of hot dogs, burgers and other barbecued treats.
● Or, if that feels like too much pressure, many churches or other places of worship, military bases and other organisations host community picnics and cookouts.
● Another Fourth of July tradition is attending a baseball game, either at a Major League Ballpark or cheering on the local team. Many games are followed by a fireworks display.
● Speaking of fireworks, this is probably the biggest Fourth of July tradition! Most cities put on a fireworks display, or employees can hold their own - keeping safe, of course!
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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