But allow me to let you in on a little secret that MBAs don't talk about much. Those locations and the others that business school students love, like London, Hong Kong, Boston or LA, are incredibly expensive. You knew that. High cost of living is no secret and people like to complain in that masochistic way about the price of rent or a meal out while saying there's no way they could live anywhere else. However, the pay doesn't really change if you're in New York or in Detroit. Think about that for a second. Housing in particular is apt. You know how far $150,000 doesn't go in New York and you know exactly how far it does go in Detroit.
It's common for pay not to fully adjust based on cost of living. That's true across industries. But many companies hiring MBAs specifically pay the same across all locations. Consulting firms are a good example of this. I've heard of a couple that have a policy of standard salaries across US locations. The consultants in New York dream of buying condos while those in Dallas have a few acres and a pool.
The evenness of pay is partly an equality issue for companies with multiple locations but there's also a supply and demand issue at play. Companies or branches in Detroit or Dallas know that to get top talent beyond the few people who have family in the area they will have to give an offer that is in the absolute sense comparable to a New York offer. This then gives them a relative advantage over the more coveted cities after cost of living is factored in.
It's easier to get a job in a non-trendy city. I can't tell you how hard Bain Texas, McKinsey Dallas, or Goldman's private wealth offices in Miami or Houston have been recruiting on campus. McKinsey Dallas sent messages to anyone on campus who in some way was from Texas, whether they were interested in finance, marketing or anything else. Target, in Minneapolis, is ambivalent about recruiting at top schools since their yield from interns to full time is so low - they can't convince anyone to live in their city long term. The number of people who show up to a hedge fund's recruiting session who has offices in New York, San Fran and London versus one that's based out of Houston or another location in the South, is striking.
So if it's easier to get a job in a non-trendy location and you have much better standard of living once you land it, what's the catch?
- You have to convince the company that you're actually interested in them and their location. These guys know they're underdogs in recruiting and they really want to separate those who are really interested, who will definitely take an offer if it's given to them, and those who are using them as a safety for when their applications to other places come through. So make sure you have a good story to tell and do your research - you need to be in that first bucket for the odds to be better than average.
- You have to actually work for that company at that location. This sounds stupid but for there to really be any value to taking an offer with a non-trendy company in a non-trendy location you have to be happy about it or at least okay with it. Otherwise you'll just be miserable and bemoaning your awful life in boring, backwater Atlanta while you're friends are having a great time paying $20 per drink in New York.
So you end up as one of over a hundred MBAs applying for one of four slots at every company in your target industry in either NYC or SF. You fill out numerous applications because your shots of success with any one company are so low. But each application you submit is lower quality because you don't have the time to devote to each, same for the interviews. You end up exhausted, stressed and pressed to find differences in any of the opportunities you get because you haven't had time to get to know the company or its work.
Let me just say, if you can do it wholeheartedly, this is one area where it really pays to buck the trend.