To work at an agency or go in-house? That is the question facing many IR professionals like Felicia Vonella. Vonella grew up professionally in an agency. After working for Dewe Rogerson for twelve years she left her position running Dewe’s global IR practice to decide what her next step would be: moving to another agency or to a company.
A straightforward decision this is not. Many ideas circulate throughout the industry about the differences between working for a corporation and working for an agency. There are many misconceptions. In the end, the only thing you can really count on is that there are few hard and fast rules. Getting experience in an agency is a common career path. For some, moving on to a corporation is perceived as a sort of graduation. Certainly there are more agency jobs than corporate positions, especially at entry level. Many corporations have just one-person in the IR department.
Agency school
Working in an agency pounds in a set of well-rounded IR skills. One can get exposure to different industries, companies, reporting styles, management styles and personalities, capital raisings, and corporate challenges all at the same time. ‘You just can’t help but learn a ton in a short time,’ says Beth Levine, president of Communications Strategies in Salt Lake City and veteran of Burson-Marsteller, Dewe Rogerson, C&N Sovran and NationsBank.
‘There is no better training ground,’ agrees Margo Happer, director of communications and visibility at Citibank and a former IR executive at Hill & Knowlton. Indeed, working as a consultant can be the ultimate way to learn to multitask and juggle the needs of several clients simultaneously. ‘To have the opportunity to work on three annual reports in the middle of an IPO roadshow is really an invigorating experience,’ she says. Though Happer’s current post couldn’t be considered an agency one, she still works for many different clients of Citibank’s depositary receipts division. As emphasized by Jeff Zilka, Chicago-based senior managing director of Hill & Knowlton’s US financial communications practice, the benefit of working in an agency is getting to bounce ideas around with other IR professionals.
On the other hand, starting out in-house gives a person grounding in what the Street is about and what the Street is looking for, notes Happer. For a person with an interest in a specific industry, it can be an invaluable way to learn the ropes from the inside out.
John Pearson of Roth Investor Relations, who is based in Spokane, Washington, started out as a geologist in a mining company when Canamax Resources tapped him to set up its IR department. The key benefits of starting out in-house, according to Pearson: you get to learn the key players who cover the industry, both buy and sell-side, focus on one industry, and learn it very well.
Another major difference between agencies and corporate jobs can be the pace and demands. ‘I know how an agency runs,’ says Vonella. ‘When I walk through the door I know my day could shift the minute I walk in – based on one client’s earnings release. I can switch from a company in Chile to a German IPO to trying to figure out how to present an earnings report for a US company. It’s the pace and the energy that are most attractive.’ The biggest question for Vonella is whether she will be able to find that kind of energy in a corporate environment.
The main factor affecting pace and energy in an agency is the number of clients. While an in-house IR department puts out earnings four times a year, someone working in an agency may work on 40 such announcements. Many clients often mean more demands, a more frenetic workday, and often less control of one’s time. In an agency one could be involved in several clients’ roadshows, or need to travel to meet with clients in different locations or even different countries. Add to that marketing-related travel to generate new business for the agency, and one may spend more time away than at home.
Chaos junkies
On the extreme, some who succeed at agencies and start to thrive on life moving in a buzzer-fast, constantly changing environment become ‘chaos junkies’, according to Beth Levine. ‘Some people resist going in-house because they think it will be like dying a slow death or going into early retirement,’ says Levine. ‘It’s a huge misconception.’ While the image many people have is of sitting around in meetings with suits and starched white shirts, producing memos and dealing with internal bureaucracy, the reality is that most successful public companies are very dynamic places to be. ‘Once on the corporate side you see that; you can’t see it on the agency side looking in,’ says Levine.
Levine points out that many agency people forget that when you are on the corporate side you have many internal clients. Those include the CEO, CFO, and industry specific people such as in banking: the state bank president and business head unit. In addition, the Street and each analyst are also clients of a sort.
Indeed, not everyone finds corporate life to be more relaxed than agency life. For Nick Miles, director of investor relations for Ares-Serono International, the exact opposite was true. Miles left Gavin Anderson’s London office in early 1999 to move in-house and says that for him, working for Ares-Serono, the biggest biotechnology firm in Europe, has been just as demanding or more so than being in an agency. ‘The ethic and industry are very fast moving, susceptible to events across many different products with different lifecycles and in different stages.’ In addition, says Miles, dealing with regulatory authorities makes doing IR for this biotech giant a challenge.
Roth’s Pearson remembers his days on the corporate side as very fast paced and intense. ‘I was a key contact in our crisis communications plan so I was on call 24 hours-a-day, seven days a week if anything was to happen. From my standpoint, the agency side is giving me more time with the family.’
Central station
Perhaps the biggest difference and greatest benefit of working in-house stems from the fact that if all works out right, you can be absolutely central to what takes place in your company. ‘You can have a dotted-line relationship to the CEO, a strong relationship to the CFO, and understand strategic transactions well before they occur,’ notes Hill & Knowlton’s Zilka. You can counsel the management team on communications aspects of what they are doing, bring into their deliberations concerns of retail and institutional investors, and how the City or the Street are likely to perceive a particular transaction.
As John Pearson puts it, ‘On the corporate side you are totally immersed in it. It’s all-consuming as your sole purpose to project a positive image for your company and build strong relations and credibility with the Street. Whereas on the agency side you are somewhat removed. It may be very busy and intense on one project, but then you can leave it behind for something else.’
In an agency you have to switch between industries and clients quickly, making it a different type of stress than working in-house. ‘At the end of the day, when working in-house you are responsible for what happens to the share price. In a consultancy you walk away,’ says Ares-Serono’s Miles.
But as Zilka notes, there is a flipside to being in-house – when all does not work out well. There are many factors outside your control: your sector could be out of favor; the management might change; the reporting lines can be altered; the CEO may not always want to have much contact with IR; the IRO can become a prisoner of the CFO; or one may simply get lost in the clutter.
On the agency side, you may or may not get along well with your superiors, but it is unlikely you will have to justify the role of investor relations or convince top brass of its importance. And agency people get what Margo Happer calls the emotional charge of doing new business. ‘Going out and pitching to a client and bringing home a new client – it’s pretty heady stuff.’
In the final analysis, both environments have advantages and disadvantages. Hill & Knowlton’s Zilka recommends that young people do both. Spending time on the client side helps people understand client life, why turnarounds might not be as fast as expected, and why documents need to be buttoned down. On the agency side they get to stand in the batting cage, pitch after pitch.
