What’s more important: the job or the location?
That’s like asking the eternal question: Which came first…the chicken or the egg?
That’s because they feed into each other and amplify their strengths. Take the aerospace industry in Southern California. Here, government leaders enticed nascent aircraft manufacturers with financial incentives – not to mention a consistent climate and wide-open land to build their enterprises and safely test their products. These firms drew technical talent to the region, which demanded that educational institutions beef up their science and engineering curriculum. Experimental research labs and military installations sprung up, as World War II forced employers to diversify into fields like missiles and computers. Although SoCal’s aerospace workforce has shrunk by two-thirds since its 80s heyday, it remains potent as new markets, such as space travel and drones, grow increasingly popular.
FUQUA VS. STANFORD – A TALE OF TWO MODELS
The same principles follow for MBAs. When they choose a school, they are automatically selecting an alumni network, one that is often clustered in particular locations and industries. Many times, these graduates’ opportunities are dictated by the economics of the region – the health of the leading employers that support the area’s middle markets; business-friendly policies from local and state governments that draw investment; and innovations sparked by startups and partnerships that are nurtured by the region’s influencers. These interconnected threads are the ebb-and-flow – the chicken and the egg – that foster a region’s culture…not to mention set its pay scale.
Indeed, region can be overlooked by MBAs in lieu of pay by business school rank, industry, or function. However, regional pay is a tip off to an MBA program’s brand reach and renown. Take Duke University’s Fuqua School of Business. Looking for an MBA programs outside the M7 with a deep domestic and global footprint? It’s hard to beat Team Fuqua. Despite being located in Durham, North Carolina, most Fuqua graduates don’t shuffle off to Charlotte, Atlanta, DC, or Nashville. Among the 357 graduates of the 2017 Class who reported their regional pay, just 65 stuck around the south – or 18%. Instead, the largest cohort – 81 graduates (or 23% of the reporting class) found jobs in the Northeast, with the rest ending up in the Mid-Atlantic (6%), Midwest (12%), Southwest (9%), West (21%), and International (11%). Such diverse locales is not only a sign of Fuqua’s market power, but a testament to the quality of its career services and alumni base.
That said, Fuqua ranked 11th overall in starting base pay for the Class of 2017 at $147,857. In contrast, Stanford GSB grads snapped up $159,400 in starting base last year –just $375 behind Wharton, which led all comers in 2017. However, Stanford grads collected the highest bases in six of seven regions measured by U.S. News – only losing out to the Wharton School in the Southwest. Among the 213 Stanford GSB grads who reported pay by region in 2017, 64% found work in states on the west coast. The next highest percentage – 16% – trekked to the East Coast. And international postings accounted for 11% of the class. To put these numbers another way, just 23 GSB students from the 2017 class – or 11% – took jobs in the Mid-Atlantic, South, Midwest, or Southwest. In short, those region’s employers may pay a premium for Stanford GSB talent, but the alumni network or employer outreach may be spotty there – at least compared to an equally-sized program like Fuqua.
WHY REGIONAL PAY MATTERS
What value does regional pay offer? Consider it one piece of a larger puzzle – a snapshot that tells you the going rate for a certain area at a certain time. It does come with a few drawbacks. Since pay is tied to area cost of living – and U.S. News data is shared by schools in its raw form – any apples-to-apples comparison between regions will be slightly askew – a number that can be adjusted here. U.S. News data also only encompasses base pay, as top MBA programs often break bonus down by occupation but rarely region. In addition, starting bonus is often concentrated in specific fields, such as consulting and finance, which adds another complication in pinpointing regional worth.
Still, regional pay offers another dimension to evaluate offers – and schools. Think of it as a starting point that provides an inside look at what to expect by region. That’s an invaluable tool when it comes time for MBAs to weigh offers – along with a justification for negotiating a better package. How much do employers pay for talent at your target business schools? Click on the links below to see how your schools fare in the regions where you hope to work.
Editor’s Note: Class of 2018 pay data will begin to trickle out during the fall.