K2 UK webinar summary: Managing moves in challenging times
As we head into the festive season, we wanted to provide you with the very latest view and insights from our K2 UK experts.
The latest in our series of webinar updates — where we bring our global mobility community together to share insights about the ongoing challenging operating climate — focuses on the continuing impact Brexit and COVID is having within our industry, but more importantly, the approach and solutions we are delivering to mitigate issues and alleviate concerns.
Our K2 UK experts provided an update on the current challenges in shipping, rental and serviced accommodation as well as school search. They provided advice on the most effective ways they’re navigating through, with careful coordination of all elements to ensure the best possible transfer experience, and the least amount of stress and upheaval.
They also provided a view of the horizon in 2022. Below is a summary of the key takeaways.
The Q&A session was facilitated the by Huw Thomas, UK Client Development Manager, with answers from K2 experts on:
• International shipping — Greg Helmer, Group Commercial Coordinator at K2
• Rental housing market — Simon Price, Director of Bespoke Services at K2
• Other key considerations — Amanda Lillie, Head of Client Services Operations UK at K2
Greg Helmer, Group Commercial Coordinator at K2 has over 25 years of experience in the relocation industry and looks after the household goods partner network in the UK and Europe for K2.
Any insight into when costs might come down? We were told January 2022 and they just seem to keep increasing?
- Freight rates are stabilising but remain high, especially in APAC compared to the rest of the world as well as Europe and North America.
- There will be a small reduction in costs on some lanes in the new year but we’re not expecting anything hugely different yet.
- Rates from Europe to Asia are still like earlier in the year, they haven’t moved much.
- The Chinese New Year could cause seasonal surcharges but the level of increases we’ve seen in the last few months are not expected.
- We are continually monitoring the situation to find cost efficiencies and value for clients where we can.
Any guidance around planning moves at this time?
- Try to provide as much early notice as possible to guarantee space in the vessels. If the shipping containers have no space, items will be brought back to the warehouse and put into storage which can lead to extra costs being incurred.
- Shipping lines recommend booking 4–6 weeks before departure.
- As soon as K2 are aware of a move, we will pre-book space on containers — it’s much easier to cancel a booking than to source a space at late notice.
Is the shortage of qualified hauliers, plus the increase of Christmas gift deliveries meaning personal goods are given less priority at this time?
- We’re monitoring this. Our shipping partners have a large network of hauliers and always give K2 priority, so we should be able to mitigate issues. But there may be some reduction in capacity from Christmas to New Years. Certain shipments may need to be put into storage before loading onto shipping containers, but we would always work through this on a case-by-case basis with clients.
Any good news?!
- Reduction in shipping prices will happen but it will be a slow process over 2022.
- Freight rates will never be what they were pre-pandemic.
- It has been a challenging year for all but thankfully K2, our clients, their assignees and our partners have got through it by working flexibly, being quick to find solutions and ensuring continuous communication to minimise the impact on assignee shipments. We’re committed to managing the challenges and minimising the impact.
- The shipping industry is working hard on developing future strategies and improvements which will eventually bring benefits in time and cost efficiencies, we are keeping appraised of these developments.
Rental housing market
Simon Price, Director of Bespoke Services at K2 has 30 years of experience in the relocation industry. He specialises in VIP and Bespoke destination services for clients top talent.
With the lack of available housing, are we seeing rental values increasing?
- Rent prices are back to pre-COVID levels or higher. It is a challenging landlord market driven by a reduction in supply for the corporate market.
- Properties that were historically available are no longer available this year.
What factors are behind the lack of availability?
- Landlords took advantage of a hot sales market.
- The international student market has also grown with 1 year pre-payments being offered and ever-increasing demand.
- There’s now 70% less rental stock than this time last year (this is primarily due to COVID but has still reduced significantly through other factors).
- There’s a bottleneck of assignees coming to London as restrictions have been lifted as well as key capital cities in Europe.
Are break clauses still negotiable?
- All terms are more challenging now.
- The expectation before was that there would be a break clause before 12 months. Any break clause earlier than 12 months is impossible now.
- If K2 present fewer demands, and work through exceptions the bid is more likely to be accepted which is still mostly more favourable than high temporary housing payments.
What does a typical home search tour look like in today’s market?
- It’s different — historically we would have delivered an orientation with the assignee, a separate home search and some settling-in. Now we’re working with assignees to be much more proactive to ensure they get the accommodation desired, it’s all about expectations. We’re also often combining activities to a tighter timeframe.
- As the pandemic is lifting, we are returning to more in-person home search tours versus virtual ones.
- There are much less properties to view — there may be only one or two appropriate properties, but this does allow for more time on orientation with the assignee. K2 is also ensuring we nurture our agent relationships so that we get the best options and notice for our clients and assignees.
- The client experience remains our number one priority.
Other key considerations
Amanda Lillie, Head of Client Services Operations UK at K2 has been at K2 for 9 years with over 25 years’ experience in the relocation industry.
What is the general state of school search across UK/Europe?
- Lots of parents believe that, due to COVID and Brexit, there should be lots of school places, but this is unfortunately not proving to be the case.
- Across Europe, many expats have bunkered down in their host location and decided not to go home. There has therefore been an absence of the natural churn that comes with the end of the school year and the beginning of a new one.
- It’s important to coach assignees to remember that there are lots of options so if the first option is not possible, there are always other great options to be worked through.
- Timing for applications is still key and we want to work with clients and assignees to ensure we get these right.
Has anything changed in serviced accommodation?
- There is lots of consolidation within the marketplace with smaller suppliers being bought out by bigger suppliers.
- Assignees are looking for a different type of accommodation now due to hybrid working and restrictions. They will spend more time in their accommodation now and so they are usually looking for an additional bedroom or space to call an office.
- Length of stay in serviced accommodation has also become longer due to the longer-term market becoming challenging.
- Serviced accommodation will come out of this hardship sooner than other elements of relocation.
How are K2 managing the current challenges?
- Being flexible, learning to adapt, working hard to do something differently and find solutions.
- Proactively managing assignee expectations to avoid disappointment and enable them to make decisions that fit the current climate. The reality is it’s more about best option rather than first choice. We do this by speaking to the assignee and their HR department to give a realistic picture of how their relocation will look today compared to a couple of years ago.
- K2 is well set to work through this ongoing challenging situation thanks to our independence and agility. We have the right structure and capability to look where we can make changes quickly to find the best way.
- It’s more about dealing with uncertainty than challenges due to the ongoing waves and new variants of COVID. But we are better prepared and can adapt accordingly.
- K2 will continue to support our clients and face whatever challenges in a mutually supportive way.
- Hybrid working affecting housing choices — assignees willing to commit to longer commutes as less often.
- Office post lockdowns — people still keen to connect and see the value of face-to-face teamwork — not seen a decrease in initiations across the sectors.
Thank you again to everyone that attended. We look forward to seeing you at the next one in 2022!