🦜 PerchPulse - The UK Market Update March 2023 🦜

A warm welcome to the March 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

●     If current worker shortage trends continue, it’s predicted to cost the UK economy £120 billion by 2030 - here are four ways to tackle the shortage

●     UK house prices are falling, having a knock-on effect on rental property supply, and the head of London’s biggest estate agent advises renters to move outside the capital

●     As food price inflation remains at a record high, with the average household spending £811 more annually, we share tips for helping employees save money on groceries

●     The Energy Price Guarantee, capping annual household energy bills at £2,500, will be in place for another three months, but the Energy Bills Support Scheme is ending

●     From renting furniture suites to snapping up a bargain on Facebook Marketplace or Freecycle, here’s how to help your relocating employees furnish their new home

Talent strategy: Skills shortages predicted to cost UK £120 billion by 2030

With unemployment at an almost record low, the UK has been seeing a major worker shortage in recent months. The latest Labour Market figures from the Office for National Statistics (ONS) show 1.1 million job vacancies - over 300,000 higher than in early 2020.

The Learning and Work Institute predicts that if current trends continue, the UK will see a shortfall of 2.5 million highly skilled workers by 2030, which could cost the country £120 billion.

The Financial Times has outlined a number of key ways to tackle skills shortages in the UK. We’re focusing in on the measures that are most relevant for People teams:

●     Better work training opportunities - UK employers spend just half the EU average per worker on training; better tax incentives for spending on training would improve things

●     Immigration system reform - expansion of visa options for workers from overseas, loosening requirements for special visas, and reducing visa processing times and fees

What should HR teams prioritise?

●     Introduce/develop internal training opportunities to improve employee retention, upskill your existing teams and attract new talent - this will help stay competitive within your industry with EU countries that are also looking to fill skills gaps

●     Finance/Tax teams should keep on top of updates to tax incentives for training spend - changes in these benefit schemes may make things more financially viable

●     Take advantage of a wider talent pool and look to attract skilled candidates from abroad when struggling to recruit among candidates based locally - take a leaf out of Germany’s book, where 70% of new roles were filled by workers from abroad in 2022!

●     Monitor updates to immigration processes/requirements, and explore new visa options which may make recruiting from overseas faster and more efficient

Home-finding: House prices are falling, impacting renters, and Foxtons boss advises people to move out of London

PerchPeek takes a look at two key news updates that show how housing market conditions continue to make things challenging for hopeful renters.

How do falling house prices affect renters in the UK?

UK house prices fell by 1.1% in the year to February 2023; which is the first annual decline in prices in the last three years.

This fall has been driven by soaring inflation and rising interest rates, which combined are really putting mortgage borrowers off - mortgage approvals are at their lowest rate since 2009.

This is likely to affect renters as:

●     Landlords are increasing rents to make up for rising interest rates on their mortgages

●     Some landlords are selling up, reducing the number of rental properties on the market

●     Others are switching to lucrative short-term holiday lets, again affecting supply

‘Struggling renters have to move further out of London’ - Foxtons boss

According to the chief executive of Foxtons, London’s biggest estate agent, the lack of available rental options in the UK capital is so ‘dramatic’ that people will need to move further out.

In Guy Gittins’ view, the main driver of this issue is not so much affordability, but a mismatch between supply and demand for available properties.

Data from rental site SpareRoom shows:

●     In March 2023, there were five active renters for every room available on its site

●     In comparison, in March 2022 there were just two renters for each room

Property portal Rightmove has also found that hopeful renters are widening the radius of their searches now, versus before the pandemic, focusing on cheaper areas.

To support employees, share these details with your teams to help manage their expectations around home-finding, and be flexible when it comes to helping them make arrangements

Support your talent: How to help your employees economise on food

Grocery shopping has hit the headlines in the UK in recent weeks, due to the lack of many fruits and vegetables on supermarket shelves. The good news is that this shortage is predicted to cease by April, as the weather warms up and the UK is less reliant on imports from abroad.

However, as British residents know too well, the cost of food has risen significantly. Research firm Kantar reports that households are paying a whopping £811 a year more on grocery bills compared to one year ago.

Here are PerchPeek’s tips and tricks on how you can help your relocating employees save money on food and other staples in these trying times:

●     For the best deals on food (but still great quality), we recommend discount supermarkets Aldi (nearly 1,000 stores nationwide) and Lidl (over 800 stores).

●     The traditional ‘Big Four’ supermarkets - Tesco, Sainsbury’s, Asda and Morrisons - are locked in never-ending price wars, meaning their prices and deals are often comparable.

●     Waitrose, Budgens, the Co-op and (especially) M&S, undoubtedly convenient and high-quality as they are, are very much at the more expensive end of the scale.

●     Shoppers may wish to avoid smaller versions of larger supermarket chains, like Tesco Express and Sainsbury’s Local, since prices are higher than in larger branches.

●     To save cash and prevent food waste, employees can check out apps like Too Good To Go, Olio and Karma to purchase food items that are about to expire and be thrown out.

●     Advise employees to buy produce currently in season, and check out the many budget meal recipes on sites like BBC Good Food, Delicious Magazine and Tesco Real Food 

Cost of living: Energy Price Guarantee to be extended for three months

Though we’re starting to see the first signs of spring - hello, daffodils! - the weather is still decidedly chilly, with snow and frost a common sight over the last few weeks. This means that most people’s heating is staying on, and so the current soaring energy prices remain a concern.

March and April are bringing a number of changes when it comes to energy bill costs. To support employees, it’s a good idea to be on top of these updates and share key information:

●     The Energy Price Guarantee, which caps household energy bills at £2,500 per year, was scheduled to rise to £3,000 in April. In a government U-turn, the £2,500 cap will now remain for another three months until the end of June.

●     However, it’s important to note that this initiative is separate from the Energy Bills Support Scheme, where all households received a £400 discount on their utility bills - in most cases, split into x6 £50 discounts on bills from October 2022 to March 2023.

●     The final EBSS bill relief discount will be provided in March 2023, meaning that as of April, all households’ energy bills will return to their previous (albeit capped) levels.

PerchPeek’s tips for helping employees manage their energy bills:

●     Make sure they’re aware that the Energy Bills Support Scheme is coming to an end

●     Where needed, help new arrivals set up utilities and select a cost-effective tariff

●     Offer guidance in shopping around for deals, and tips and tricks for energy-saving such as running appliances at off-peak times

Support your talent: How to help relocating staff furnish their homes

If your relocating employees are moving into long-term rented accommodation (as opposed to an Airbnb or a serviced apartment), they’ll find it super useful to know about furniture options! It’s a hot topic according to PerchPeek’s UK experts - here’s our rundown of the key points:

Option 1: Rent furniture

●     The most costly option - only recommended for short-term assignments (6-12 months)

●     The easiest solution of the three, as delivery, assembly and collection are included

●     Recommended providers in the UK are Cort Global, Zenkki and Homebound

●     Large range of choices, from single items to furniture sets for entire rooms

Option 2: Buy second-hand furniture

●     By far the most cost-effective option but requires the most time and effort

●     Online marketplaces include eBay, Facebook Marketplace, Gumtree and Freecycle

●     Employees should be careful on online marketplaces and be vigilant against scams

●     There are specialist furniture charity shops in most cities, as well as vintage markets

Option 3: Buy new furniture

●     Less expensive than renting but more expensive than buying second-hand

●     IKEA is a very safe bet; there are 22 branches across the UK, including four in London

●     Other stores with low-cost options include Argos, Dunelm, The Range and B&M

●     Flat-pack furniture assembly services are available via TaskRabbit - or hire a handyman!

Furnishing one’s flat isn’t just a necessity, it’ll also make a massive difference in helping relocating employees settle into their new city by putting a personal stamp on their place - it’s what turns it into a home! Our advice is to support relocating staff by presenting these options at the outset and helping them choose the best one to suit their budget and other requirements.

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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