The theory goes something like this: investor relations is an expanding profession, becoming ever more prevalent among not just the top companies, but also small and mid-caps. Increased demand for their services has made IR practitioners this year’s must-have in the corporate world – with the humble IR servant (yes, you) reaping the (substantial) rewards.
But a great theory isn’t necessarily much good in practice. A recent survey by the UK Investor Relations Society reveals that the average annual salary of its members has fallen by £6,500 ($9,700) since 1998. Even accounting for the increased number of IROs at lower- paying small caps and the rise in the number of women working in IR (sadly the gender pay divide, at least in the UK, is alive and well), this figure hardly points to a boom in IR salaries.
A shortage of IR candidates doesn’t guarantee that finding a new IR job will be easy, either. Take Clea Rosenfeld, the recently appointed IR manager at UK drug company Shire Pharmaceuticals. For her, the move to an in-house post from her position at Thomson Financial Investor Relations was hardly a piece of cake. ‘There is a definite shortage of IR professionals, but it was terribly difficult to find an in-house job. There are three key requirements for people looking to move to the corporate side: an analyst background, accountancy skills and lastly good sector knowledge. I had none of these,’ she says.
Experience is key in many professions, and IR is no exception. Throughout the world of IR recruitment, opportunities abound for |experienced IROs. ‘The number of people with experience of investor relations has increased dramatically over recent times,’ adds David Mounde, head of investor relations at Vicky Mann and Associates, the recruitment consultants. ‘IR is a relatively new industry, so you won’t find a lot of junior IR candidates with experience. It’s all about translating their different backgrounds into IR,’ he says.
Euro flow
But Mounde believes that candidates’ backgrounds and qualifications matter less when companies and consultancies are looking to recruit a high-level IR professional. ‘It’s all about the right person. Often it comes down to the chemistry between candidate and client when they walk into the room,’ he adds.
Though the UK IR job market may possess a good degree of fluidity, the same cannot be said for the rest of Europe. ‘On the continent it is really hard to find the right person,’ Mounde claims. ‘I recently spoke to a French banking IRO who said he’d been called by 30 other recruiters and companies, interested in employing him. This is because IR in Europe is such a new thing.’
One solution to the shortage of IR skills in continental Europe would be for experienced IR professionals from the UK and US to move to Europe. But Mounde has seen little evidence of this and doesn’t expect to see IR staff from the Anglo-Saxon nations invading Europe yet. ‘The UK and US are relative centers of excellence for investor relations, but many people would see going to work in continental Europe as taking a step backwards in terms of IR development,’ he comments. And besides, as long as demand for IR skills in the UK remains healthy, few are likely to consider relocating abroad.
‘There’s a shortage of everybody in communications roles. Finding people for jobs is difficult, as is getting people to move from their present posts,’ claims a bullish Todd Civardi, consultant at UK headhunters Foster Crouch. He says that many IR professionals are offered large salary increases as soon as they hand in their resignation notice. Some have boosted their pay packets by as much as 30 percent, as companies and consultancies cling to their staff. ‘Over the past five years we’ve seen a tremendous increase in our business. IR has grown, the economy is buoyant and there have been so many IPOs,’ Civardi adds.
Civardi may be busier, but according to Fred Stone, managing director at Thomson Financial Investor Relations in London, there is little shortage of IR professionals. ‘It very much depends where you look. The consensus is that it is supposed to be a tight market, but the reality is that there are some very good people out there,’ he says.
He believes that while specialist headhunters abound, there remains no substitute for networking when searching for staff. ‘You can steer the headhunter in the right direction, but if you’re looking to appoint someone senior, you should already know the likely candidates,’ he says. Putting in the hours at IR conferences, functions and through your day-to-day job can pay dividends for both employer and employee when it comes to IR recruitment, meaning that companies and consultancies know exactly who they want to recruit. Take Hugh Roberts. The IR executive at UK telecoms company, Carphone Warehouse, knew his present employers before he began working for them. ‘I had already made presentations to the directors of Carphone Warehouse in my previous job in sports marketing,’ he explains. ‘I knew the main directors well and they came to me directly and offered the job. It didn’t take me long to decide.’ Roberts was employed to see the company through its July IPO, and is enjoying his new role. ‘There’s a lot more to IR than either I or the directors initially thought, but Carphone Warehouse is an exciting business and it has a good track record,’ he says.
Recruitment bypass
Another who ended up working in IR for a former client is Christian Marriott, director of IR at private equity firm Mezzanine Management. As with Hugh Roberts at Carphone Warehouse, Marriott was well acquainted with his future employers. After beginning his career as a journalist he moved to work for corporate finance boutique Campbell Lutyens – ‘spending four years number-crunching,’ he explains. ‘I had worked with Mezzanine in the past and they came straight to me with the job offer,’ he says. Like IR, the private equity community is small enough for everyone to know everyone else, Marriott explains. ‘Now I’m enjoying helping investors understand what the fund is doing.’
Both Roberts and Marriott managed to bypass recruitment consultants when they moved into IR, a move recommended by Clea Rosenfeld. ‘Don’t go to a recruitment agency,’ she urges. ‘In my experience they just want to place you with a consultancy, as none of the recruitment people I spoke to put me in front of a company.’ Furthermore, Rosenfeld claims that hers was not a unique experience: ‘I’m not the only one this has happened to.’ She eventually found her new job through an advertisement in the Financial Times. Ironically, Shire Pharmaceuticals had employed a recruitment agency to publicize its IR vacancy, a relatively unorthodox move in the world of IR recruitment, where vacancies are rarely advertised.
Rosenfeld is not alone in seeking to move from a consultancy to an in-house post. The shift in-house is a well-trodden path for IR professionals, and for Rosenfeld, the move seems to have paid off so far. ‘I love it here. I’ve always wanted to move in-house and gain the kind of sector specialization that you don’t get working as a consultant.’ But going in-house is an easier move for analysts than IR consultants, she claims. Citing their strong sector knowledge and excellent understanding of the workings of the financial markets, Rosenfeld says that analysts are a popular choice for corporate IR posts. This view is echoed by Todd Civardi: ‘People going to in-house roles understand the job and thoroughly understand the business. As for the consultancies, they require people who foremost understand the City and how it operates,’ he says. TFIR’s Stone agrees, pointing to increasing expectations for a solid financial grounding. ‘Several years ago analysts found that they were being required to have some financial qualifications. Now IR is going down the same route.’ Along with an ability to communicate, it seems that being able to understand the corporate balance sheet is now a key requirement for current and aspiring IR professionals.
No exodus
Many UK consultancies are already so stretched for staff that they are turning away business, claims Civardi. David Mounde agrees that demand for IR personnel is greater from the consultancies, but he doesn’t detect a major exodus from the IR consultancies to in-house positions. ‘It can be manic working as a consultant because you have to juggle many projects at the same time, and some people opt to go in-house so they can enjoy a better quality of life working on one project,’ he says. For Clea Rosenfeld, the move in-house has not only improved her quality of life, but also sharpened her IR skills. ‘I’ve learned so much. This company is small enough for me to have constant access to management. It’s great fun.’ So how are the IR consultancies seeking to hang onto their staff? ‘We pay the market rate along with the full suite of corporate benefits you would expect from a company as large as ours,’ replies Stone.
Civardi summarizes the IR job market: ‘It’s not rocket science. It has become a candidate’s market instead of a client’s market for us. If we find someone who’s good, we can find several places for them,’ he adds. Others aren’t quite so upbeat in their analysis, pointing out that much depends on the background and experience of the individual IR professional. As in most careers, there are those who are hunted, and then there are those who lack the background or experience. For the latter the recruitment process is a wholly different experience – seeking out work rather than finding themselves sought after. Clea Rosenfeld advises potential IR candidates to talk to corporate brokers and bankers. ‘For example, the people at Merrill Lynch will know if their clients are in need of a good IR person,’ she says.
Opinions vary, but the consensus is that the market for IR skills remains strong. But don’t get carried away – as with many other financial professions, it’s easier to move jobs once you’ve climbed the greasy pole and are at the top of your chosen vocation. Pay for IROs appears to have stabilized and while the supply of qualified IROs on to the job market may be short, this doesn’t mean that employers are willing to see a dilution in quality. You can search all the jobs sections in magazines and newspapers, visit every recruitment consultant and write to every IR department, but there is no substitute for networking. ‘We often hear about IR vacancies through contacts, continues Mounde. The IR industry in Europe is so small that everyone pretty much knows each other. The network is the best source.’
IR may not provide its workers with the fabled salaries of investment banking or corporate finance. But the recruits featured here are clearly content in the knowledge that the skills and experience they acquire will prove to be a highly marketable commodity as investor relations around the world takes off.
