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 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
● 86% of US employers surveyed have outsourced roles originally intended to be US-based due to difficulties securing US visas, according to immigration trends report
● New study reveals the top 10 most and least expensive cities in the US when it comes to cost of living; how to support home-hunting employees on lower budgets
● Following a conference-packed few weeks, PerchPeek CEO Paul shares his top three insights gained on the hottest topics in the industry: duty of care, cost savings and AI
● Spotlight on tech hub Austin, Texas, where the average rent for a 1-bed unit costs $1,599 - plus, how rental costs and the cost of living compare to other major cities
Following on from the US Immigration Trends report we shared in our last issue, we’re digging further into one of the key trends raised: that more and more tech companies are choosing to move jobs outside the US in order to meet recruitment goals and avoid immigration barriers.
Immigration rules are a blocker to hiring foreign talent
Employers have a keen appetite to recruit talent from overseas - in fact, 94% of those surveyed would hire more foreign talent if there were fewer immigration barriers! Since many employers struggle when it comes to securing US visas for foreign nationals, employees are being transferred or having to leave the country, and roles are being outsourced.
● 81% of companies transferred foreign employees abroad due to US visa issues
● 82% saw a foreign national employee forced to leave the US due to visa issues
Snowball effect
This trend of employers moving jobs that were originally intended to be US-based to other countries - such as India, Mexico, and countries in South and Central America - is having a knock-on effect on how those companies operate going forward. Moving roles abroad leads these businesses to open locations in those countries and then continue to recruit there.
"We're seeing companies that historically have been totally domestic without any overseas presence at all, and very much tied to a physical presence start to explore opportunities [for hiring and opening locations in other countries]."
- Joel Eisenreich, a principal with Deloitte's tax division
PerchPeek insights
Companies are facing an interesting balancing act at the moment when it comes to acquiring talent. Faced with serious skills shortages, firms need to look abroad for skilled candidates when the local talent pool is found to be lacking, but of course immigration rules make this tricky.
For some roles it may be feasible to convert to fully remote, but for others, it’ll be necessary for employees to be US-based. Managers will need to consider which is the right option for their talent and their business needs, and may wish to employ the services of a specialist immigration provider to help take the burden off People teams and speed up the process.
For more stats, check out the Envoy Global report in full at their website!
For relocating employees in the US, the city in which they live will make a huge difference to how far their salary stretches when the cost of living is taken into consideration.
Most relocating employees, especially those employed by huge global brands, will be located in some of the country’s most expensive areas. It’s important for compensation teams to consider the extent to which the varying cost of living can affect employees, particularly for junior staff.
ApartmentList has released a handy new study detailing the most and least expensive cities for the cost of living - check out a summary below!
Diving into the full report, the cost of living is divided into several components including housing, utilities, groceries and healthcare, and how they individually differ from the national average.
Perhaps unsurprisingly, housing is the factor that makes the most difference in this rundown of the most expensive cities in which to live. Looking at the top three cities:
● San Francisco housing is +208% above the national average
● New York housing is +210% above the national average
● Anaheim housing is +158% above the national average
PerchPeek insights
It’s of course no great surprise that the most expensive cities are the most popular and most populated major cities in the US. However, it’s important for HR and Compensation teams to keep in mind just how difficult it can be for employees to make ends meet in areas where the cost of living is so much higher than the national average, particularly for staff on lower salaries.
This report illustrates this point well, and highlights that of all the factors comprising the cost of living, housing is consistently the expense that deviates furthest from the national average in these popular metropolitan areas. To support relocating employees to find a home:
● Provide guidance on cheaper neighbourhoods that are still within reach of the office
● Share information on budget options such as shared accommodation
● Offer a relocation package with house-finding support - crucial in competitive markets!
It’s been a packed few weeks for the PerchPeek Leadership Team, stretching their wings and soaking up knowledge at the biggest conferences that bring together HR and global mobility professionals to share valuable insights into the latest trends and issues impacting the industry.
Conferences attended in April & May 2023 (make a note for next year!):
● EuRa International Relocation Congress 2023 - Dublin
● Centuro Global Expansion Conference 2023 - London
● HR Technologies UK - London
● Forum for Expatriate Management (FEM) Summit 2023 - Dallas
Following dozens of conversations and sessions with global mobility leaders, PerchPeek CEO Paul Bennett shares his top three insights from the FEM Summit:
● Duty of Care - It’s so important to offer robust support and look after employees’ wellbeing while they’re tackling the incredibly demanding process of relocating to a new city. Yet so often we struggle with providing high quality DoC for lower budget movers. A lot of companies are still miles behind in their use of technology to provide significant support at an accessible cost.
● Cost Savings - It’s a common theme that budgets are being squeezed universally given a broad macroeconomic downturn, and HR leaders are increasingly being asked to do more with less. Internally, it’s often perceived as confusing why relocation costs so much and people are on the hunt for ways to support their talent in a cost-effective way.
● The Impact of AI - Artificial intelligence is the subject of the moment, but it seems that while it’s noisy right now, it’s barely being used in practice within the industry. There’s so much potential for AI to automate tasks and improve efficiency, creating extra time and headspace that can be dedicated to improving the experience for relocating employees.
This month we're focusing on Austin, Texas, the 10th largest city in the US by population and a growing tech hub, home to the so-called ‘Silicon Hills’ business district. Here are the latest unit prices and trends, and other key updates for People leaders supporting relocating employees.
Austin rental market update
Key trends at a glance (source: Zumper.com):
● The average rent for a 1-bedroom unit in Austin is $1,599 - up +3.2% YoY
● Rents hit an annual high in Sept 2022, at $1,710 for a 1-bed and $2,168 for a 2-bed
● 55% of Austin households are renters, and 45% own their properties
Breakdown by apartment type:
Facts and figures
● Austin has been named by TechCrunch as ‘a city of unicorns and tech giants’ - it’s the home of Tesla and Oracle headquarters, and secondary offices of many of the largest tech companies in the world, including Google, Apple, Amazon and Facebook.
● Texas residents don’t pay income tax, which makes a big difference in terms of cost of living. Austin is a moderately expensive place to live, but the cost of living is 3% lower than the national average, and generally offset by comparably high wages.
PerchPeek insights
The extent of the difference in rental costs between Austin and other cities is eye-opening. Taking the average cost of a one-bedroom apartment, for example:
● Austin - $1,599
● San Francisco - $2,995
● New York City - $3,837
As the cost of living soars, particularly in the most populous US cities such as New York and San Francisco, employees may be considering moving somewhere cheaper - an option that’s been opened up considerably thanks to the boom of remote working and digital nomadism.
This information may also help inform strategy when investigating potential new office locations, or considering implementing a remote working policy as part of a drive to retain existing staff.
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.
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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