🦜 PerchPulse - The UK Market Update September 2023 🦜

A warm welcome to the September issue of PerchPeek’s UK 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

• New Indeed study reveals that foreign interest in UK jobs has shot up by +146% in two years, making up 5.5% of all searches for UK roles - what this means for GM leaders
• New Flexible Working Bill enters UK law, giving employees more rights and protections - summary of changes for HR teams, and insights on implementing effective policies
• UK rental costs at highest level since records began in 2016, and Londoners spend 40% of income on rent - latest stats for GM leaders and tips on how to succeed in market
• Inflation fell to 6.8% in July and consumer confidence is higher than expected, yet many employees are still feeling the pinch - how to support staff and improve retention

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Talent strategy: New study shows foreign interest in UK jobs has shot up by +146% in two years - what this means for GM strategy

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Since the UK government launched its new post-Brexit immigration system in January 2021, foreign interest in UK jobs has more than doubled, according to a new study! Here’s the lowdown on the key stats for HR and global mobility professionals to be aware of.

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In a recent study by global job search platform Indeed, the proportion of searches for jobs based in the UK conducted by workers from outside the country has risen dramatically.

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• The share rose from a low point of 2.2% in April 2021, to 5.5% in June 2023
• This is a massive increase of +146% in just over two years, and a rise of +69% when comparing to pre-pandemic figures
• The new 5.5% is also well above the 2017-2019 average of 3.5%

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The UK’s figure of 5.5% may initially seem to pale in comparison to the top three countries in the rankings (Luxembourg, Oman and Switzerland, all with shares of 40-75%) - however, it stands to reason such nations that have historically been so expat-reliant would present high figures.

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“This research underscores that the UK government’s new immigration policy is operating as intended, with requirements for non-EU workers generally easing after Brexit.” 

- Pawel Adrjan, Director of EMEA Research, Indeed

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PerchPeek insights

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As the UK has been tackling a major worker shortage across multiple industries in recent months - predicted to reach 2.5 million highly skilled workers by 2030, if current trends continue - it’s good to see evidence of the increasing interest of foreign candidates in UK jobs!

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This is a great opportunity for People Leaders to take advantage of this interest and increase efforts to recruit talent from overseas, by posting on relevant job sites and head-hunting qualified individuals. It’ll also be crucial to have a well considered relocation policy in place, to play an important part in the overall benefit package, and of course, expedite the move process.

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Talent strategy: New Flexible Working Bill to become UK law - summary of key changes for HR teams, and insights on effective flexible work policies

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Millions of British workers will have more flexibility over where and when they work as the Flexible Working Bill achieves Royal Assent. Here’s a summary of the key details for global mobility leaders, and PerchPeek’s insights on implementing effective flexible work policies. 

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What’s in the Flexible Working Bill?

• Employees will be able to make up to two flexible working requests within 12 months
• Employers will have to respond to each request within two months rather than three
• Employers must consult with employees before flexible working requests are denied
• Separate legislation will also grant workers the right to request flexible working from the first day of a new job (rather than working there for 26 weeks, previously)

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The Flexible Working Bill has now achieved Royal Assent, meaning it is confirmed that the bill will enter into UK law. The timeline for the law to take effect is projected to be Spring 2024.

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According to the gov.uk website: “Research has shown companies that embrace flexible working can attract more talent, improve staff motivation and reduce staff turnover – boosting their business’s productivity and competitiveness.”

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PerchPeek insights

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The world of work has changed dramatically in the last few years, with the pandemic forcing employees to go fully remote and thereby proving their work can be done effectively from home.

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The government is now encouraging the notion of flexible working and working to ensure that employees are protected by law. This new bill sets out the minimum requirements for all UK companies, but beyond this, businesses may of course define what flexible work looks like for them, and how it would work best for their employees and business objectives. A company that offers flexible working and sets out clear guidelines will be a big draw for some candidates.

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Top tips if you wish to implement flexible working at your company

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Here are PerchPeek’s top tips for implementing flexible working in a thoughtful way, especially when it comes to relocating staff and new starters - it’s important to begin on the right foot!

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• Embrace flexibility as a core principle within your People strategy and be clear on boundaries, enabling employees to achieve a work-life balance that suits them well, but also suits business needs.
• Invest in technology and infrastructure that supports remote/flexible work arrangements while maintaining business productivity and engagement. This includes remote management software, possibly EOR and payroll support, and productivity suites.
• Champion open dialogues with employees to understand their preferences and align policies accordingly (as flexible work means very different things to different people!), helping a seamless transition into this new era of work!

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Home-finding: UK rent at highest level since records began in 2016, and Londoners spend 40% of income on rent - latest trends for HR leaders

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It’s been a super busy summer, with students and relocating employees alike moving to their new UK city over July and August. As ever, hopeful renters have a challenge on their hands when it comes to securing a rental property in this tricky market, so we’re sharing the latest rental news stories and trends, to help global mobility leaders support their new UK arrivals!

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1 - UK rents rise at fastest rate since 2016 - BBC News

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• The cost of renting has hit its highest level since comparable records began in 2016
• Prices paid by UK renters rose by +5.3% on average in the 12 months to July, according the Office for National Statistics (ONS)
• There are 20 requests to view each available property, according to property portal Rightmove, up from six prior to the pandemic

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2 - Londoners spending 40% of their income on rental costs - BBC News

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• City Hall figures suggest average London rent could surpass £2,700 per month in 2024
• The current average as calculated by by Rightmove is £2,567
• On average, London households are spending 40% of their income on rent

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3 - Trend of more tenants in market, with fewer rental properties, to continue - Sky News

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• A residential market survey by the Registered Institute of Chartered Surveyors (RICS), showed that demand for rental properties rose "firmly" over the three months to July
• This was the strongest quarterly increase in demand since the start of 2022
• Most surveyors said instructions from landlords decreased further, resulting in an imbalance between property demand and supply

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PerchPeek advice for People Teams

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It’s safe to say that this isn’t the most positive news roundup when it comes to UK rental market trends, but as an HR professional supporting relocating employees, you’ll no doubt be aware of how tough the landscape has been for some time. One potential positive point is that now it’s September, we may see a slight annual slowdown in price rises, following the height of summer.

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And of course, it’s certainly possible for employees to achieve success in the rental market and secure a home - they’ll just need to receive decent guidance and have the right tools at their disposal. Here are PerchPeek’s top tips for ensuring market success:

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• Manage expectations early, by providing benchmark rental costs and realistic timelines
• Share information about market nuances like overbidding and offer guidance on limits
• Offer advice on the best property platforms to use, and encourage setting up alerts
• Be flexible when it comes to letting employees attend viewings at a moment’s notice!
• Provide support in reviewing lease agreements and vetting suppliers, to keep staff safe

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Cost of living: Inflation still falling and UK consumer confidence has risen higher than expected, but employee retention still at risk - key stats for HR

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The cost of living crisis appears to be easing, with consumer confidence rising higher than expected in August. Here are the latest statistics on living costs, providing key knowledge for HR and global mobility leaders supporting relocating employees in the UK.

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According to the Financial Times, UK consumer confidence increased more than expected in August 2023, influenced by lower energy prices and accelerating wage growth.

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Source: Financial Times

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“While the financial pulse of the nation is still weak, these signs of optimism are welcome during this challenging time for consumers across the UK.” - Research group GfK

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What’s the latest news around inflation and wages?

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• In July 2023, inflation fell to 6.8%, the lowest rate since February 2022
• This is down from a peak of 11.1% in October 2022
• Wages increased at the quickest pace on record in the three months to June, rising faster than prices for the first time in around a year and a half

Source: Financial Times

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Employee retention

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Though the easing of the cost of living crisis is positive news, the hardships of recent years have galvanised a lot of working people to move on and seek higher compensation packages.

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In a June 2023 survey of 54,000 workers:

• 26% said they intend to leave their job in the next year
• 47% of UK workers said they had little to no savings left at the end of every month
• A further 15% also stated that their household struggles to pay the bills

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PerchPeek insights

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After a tough couple of years for the majority of UK households, with the cost of food, energy and other living expenses skyrocketing, there’s reason to be tentatively hopeful that the cost of living crisis really is starting to ease. However, many UK residents are still feeling the pinch, and it’s pushing a large number of workers to proactively seek new opportunities in other companies.

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Here are PerchPeek’s top ways that HR leaders can help support relocating employees struggling with the high cost of living in the UK, and improve employee retention:

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• Review compensation and benefit packages regularly to reflect living cost fluctuations, ensuring employees feel fairly rewarded for their hard work and personal circumstances
• Offer flexible and remote working arrangements to help alleviate commuting expenses and improve work-life balance, enhancing employee satisfaction
• Implement financial wellness initiatives and provide handy resources to help employees manage their finances, reducing money-related stress and making them feel supported
• Recommended platforms and apps to check out include Pluto for financial coaching, and financial wellbeing platforms Wagestream and Nudge Global  

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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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