MBA Pay: The Impact Of Moving Overseas

Moving internationally, post-MBA, could actually hurt your pay prospects, a new study finds.

The study, conducted by professors from the Wharton School, London Business School, and Utrecht University, found that MBA grads who moved internationally once or twice experienced less pay growth compared to those who stayed put. However, grads who made more than four international moves, termed “Superglobals”, saw substantially higher pay growth. The authors collected survey data from 1,322 MBA grads, analyzing their career steps, countries worked in, and compensation at various job stages.

“The negative relationship between initial international mobility and pay surprised us, because it challenges the notion that broader international experience will automatically be rewarded with higher compensation,” the authors say. “We found that while our interviewees often described these moves as enriching and rewarding in other ways, they could be financially costly.”

“SUPERGLOBALS”

One caveat of the study was that the greatest financial benefits went to a small number of MBA grads who made more than four international moves after their MBA. Superglobals saw substantially higher pay growth with their sustained international mobility.

“Based on the interviews we conducted to supplement our quantitative study, it seems that their extraordinary and wide-ranging global knowledge, skills, and capabilities rocketed them into a highly valued elite global class of their own,” the authors say. “Because of their extensive global experience, they were attractive candidates for particular high-level executive roles — and they also had very strong negotiating power when they were recruited for those roles.”

WANT TO MOVE INTERNATIONALY? HERE’S HOW TO DECIDE

The authors note that the MBA grads in their study sample aren’t fully representative of all MBA grads in the world. Still, the findings suggest some general implications for MBA grads considering whether to move internationally for work after business school. If moving internationally is a potential plan for you, consider the “three Ps”: personal enrichment, professional opportunities, and pay.

Personal enrichment is, without a doubt, the biggest benefit to moving abroad. A foreign environment brings exciting adventures, curious exploration, and diverse culture immersion.

“If this is what motivates you, maybe you want more out of life than getting the highest-paid job you possibly can where you already are,” the authors say. “Of course, you will still want to get paid as much as you can, but it might make sense for you to trade off maximizing your compensation for the international opportunities that really excite you.”

Professional opportunities can also be another potential benefit for those who move abroad. Many MBA grads interviewed in the study said that they found opportunities for professional growth and learning more compelling than those available in their home country.

“I wanted to run a business, and then I wanted to run a number of businesses, and then a region, and a division, and so on,” one MBA grad says. “And those opportunities came for me because I was prepared to move.”

If pay is top of mind for you right now, it may be best to stay put in order to maximize your compensation and funds.

“Maybe you have children or elders to support; maybe you need to pay off debts,” the authors say. “Whatever your reasons, this could mean you decide that moving internationally is not worth a cut in your current pay or a possibly longer path to the financial peak of your career.”

Sources: Harvard Business Review, Academy of Management

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