Dive Brief:
- Big cities offer employers advantages they don't get in small metro areas — including a larger talent pool, better infrastructure and access to customers — but smaller cities offer advantages that are important to job seekers, according to new data from Indeed’s Hiring Lab.
- Salaries for most jobs stretch farther in smaller metro areas than in large ones. According to Hiring Lab, unadjusted salaries in metros with at least two million people are 7% higher than in metros with populations of fewer than 250,000 people. After accounting for cost of living adjustments, salaries are 9% lower. Hiring Lab researchers noted many small metro areas also have attractive amenities like beaches, cultural activities and nice weather for which some workers are willing to trade a higher salary.
- Small cities aren't better for all workers, Hiring Lab noted. Some high salary occupations like tech still pay more in big cities even after cost of living adjustments.
Dive Insight:
Employers may be drawn to the larger talent pools and business amenities available in major metropolitan areas, but data shows employees are open to other geographic locales. According to recent analysis, big cities may not be ideal for all workers.
LinkedIn's Economic Graph initiative found that large cities continue to hire a large share of skilled workers. At the same time, however, the report noted a migration of workers from large cities to smaller metro areas, like those in the South and Midwest. This has sparked discussions of whether small metro areas can attract talent away from large, higher-paying cities.
As the data from LinkedIn and Indeed's Hiring Lab showed, not all workers want to live in big cities and some have been willing to trade in larger salaries for lower-paying jobs in smaller metro areas. Money might still be the top motivator for jobseekers, but some cities have also rolled out perks and incentives in an effort to attract talent. Perks like flexible work options, a positive culture and development opportunities, and benefits like wellbeing programs could be motivators for some workers.
Salaries are typically higher in cities because the cost of living is so much higher than in smaller metro areas. In many cases, wages haven't kept up with living costs and inflation. One example is Silicon Valley in the San Francisco Bay area, which has one of the highest costs of living in the U.S. Seventy-eight percent of tech workers — who are often well-compensated — would relocate to a less expensive locale, according to a CompTIA study released in June. And 75% of workers, in general, would be willing to relocate to areas where they could live more affordably, a study by Citrix Systems found.
