Desperately seeking IROs
Changing market conditions and the fluctuating fortunes of companies across the globe post-pandemic are enough to put most industries in a spin when it comes to careers, but what are the observations and experiences of those within IR when it comes to the current job climate?
Johanna Kent is vice president of people and culture at Virgin Orbit, which recently recruited Stephen Zhang to the role of vice president of IR. Kent remarks that, as with other sectors, demand for IR talent is outstripping supply.
Johanna Kent, Virgin Orbit
‘Across all functions and industries right now, it’s a job seekers’ market – this is not unique to the IR space,’ she notes. ‘There are a lot of jobs but candidates are in the driver’s seat in many cases, so companies are getting creative when looking at non-traditional backgrounds, and in how they formulate offers. Different companies in different stages of growth will be able to pull on different levers – such as cash vs equity vs benefits, for example. Given the recent increase in special purpose acquisition company activity, the demand continues to grow for IR professionals, whereas the supply hasn’t necessarily grown at the same speed. As always, that creates increased competition.’
Jeffrey Goldberger, a principal at communications consultancy KCSA, agrees that it’s IROs who have the upper hand. ‘Is it a tough job market?’ he asks. ‘That all depends on which side of the equation you sit on. For employers, it has never been more difficult to hire new – and retain existing – IR professionals.
‘Conversely, IR pros are sitting pretty, commanding unheard-of salaries across all skill levels. KCSA has worked exceedingly hard to address these challenges. For the first time in its 50-plus year history, we hired an internal recruiter to drive our hiring efforts.’
Tom Ryan, CEO at communications and advisory consultancy ICR, says: ‘In my 20-plus years in the IR world, I have never seen IR elevated to such a highly strategic function internally. Small mistakes can have adverse consequences for CEOs and CFOs, so IROs and IR consultants better know how to navigate thorny issues. Former Wall Street analysts have pursued the field in increasing numbers – which was unheard of 20 years ago.’
Tom Ryan, ICR
In a crowded career space, however, Richard Davies, managing director of global investor relations consultancy RD:IR, advises caution against cutting corners or neglecting the IR function altogether. ‘My experience tells me the market is now more split than ever between companies that take IR seriously and recruit accordingly, and those that do not, relying on a chain of internal appointments to cover the role or having no dedicated IR resource whatsoever,’ he says.
‘My experience also tells me that companies that do not take IR seriously have a shorter shelf-life and a lower eventual sell price than those that do. Not taking care of shareholders is never a good strategy!’
Recruitment tactics that reap rewards Talent shortages mean companies need to be doing all they can to engage with potential candidates. Jon Douyard is CFO at The Shyft Group, which recently recruited a new vice president of IR. He advises firms to ensure they’re enticing candidates with a positive narrative.
Jon Douyard, The Shyft Group
‘Clearly, the job market today is giving employees – not just leadership level – the opportunity to choose from several options,’ he explains. ‘Given the scope and external focus of the IR role, it’s important that the company has a compelling story that resonates with the investment community. Having a credible, engaging strategy makes the opportunity exciting for new and potential IROs.’
So what recruitment strategies really work? For Douyard, it’s a case of not what you know, but who, when it comes to recruitment success. ‘The most effective tactic has been leveraging my network – investors and analysts have interacted with countless IR leaders and have a view on companies and individuals who do it well,’ he says.
For Goldberger, implementing new recruitment strategies has reaped rewards. ‘Historically, we relied on referrals, job postings and outside recruiters to bolster our hiring efforts,’ he says. ‘We still use these tactics, but we’ve found that having a captive in-house professional has increased our access to a broader pool of candidates.
‘KCSA also launched the first-ever crowdsourced hiring campaign in investor relations, offering $5,000 to individuals whose referral results in a successful hire. While it remains early days in the campaign, we have experienced a definitive increase in the flow of candidates and a spike in traffic to our corporate website.’
For employers, it has never been more difficult to hire new – and retain existing – IR professionals
Sharing this experience, Ryan adds: ‘ICR is probably the largest IR-centric agency in the world, hiring 180 staff in 2021. We have two internal recruiters and four external recruiters. People who join us and are great at what they do can earn excellent cash compensation. Equity is owned by roughly half the firm – that creates an owners’ mentality and motivates the team to do great things.’
Kent’s view reinforces this idea that it’s not just about the tactics, but also the narrative and rewards. ‘Authentically sell what’s unique to your business,’ she says. ‘Each company has something different to offer and being authentic about what that is – the culture, the experience the candidate can expect – becomes your point of differentiation. Flexibility is the name of the game right now and hitting the right points of flexibility will win the right candidate every time.’
Stephen Zhang, Virgin Orbit
This give and take, from employer and candidate alike, can result in successful recruitment, says Zhang. ‘Be flexible,’ he suggests. ‘Companies are flexing, but your willingness to look at things in an unconventional way could benefit both sides. Be clear on your non-negotiables, but be flexible in other areas. Think about what will make you happy, and how to achieve that.’
Top tips for IR career-movers Where should IROs considering their next move concentrate their upskilling efforts to gain a competitive advantage? ‘Learn the capital markets, the art and science of the stock market – and what creates value in a company’s shares,’ advises Ryan. ‘Ultimately, a CEO will be judged by the company’s stock price, pure and simple, and an IR professional at the top of his or her game can help a CEO manage that to a degree.’
Davies recommends that IROs do their homework and both company and candidate should be direct. ‘Ahead of the interview, know the company as much as you can from its investor communications, including its ESG approach,’ he says. ‘Know the company’s competitors, its ownership (if possible) so you know the free float, where the investors are based and the split between retail and institutional investors. Overall, my top tip for both candidates and companies is: be honest! Both sides should have a frank and candid talk about expectations, skillsets required and offered, relevant experience and future plans.’
Douyard says increasing their knowledge on specific relevant topics, as well as the business as a whole, can give candidates an advantage. ‘IROs who take advantage of interfacing with all areas of the business can really stand out,’ he says. ‘This enables them to speak to the business more naturally and really develop solid, trusting relationships with analysts.
‘Identify key trends – such as ESG, for example – where you can not only gain certifications and become a subject matter expert, but also take on leadership responsibilities that can influence and drive the long-term strategy of the company. Success in this area can be a key differentiator.
‘Understand the prospective company’s story and how you would connect to it. A significant portion of the role is to have direct discussions with management – what’s going well, what’s not. You don’t have to be part of a company yet to have an opinion. Understanding the investment thesis and providing management with thoughtful feedback in an interview process is both appropriate and typically viewed favorably.’
Know your USP The key competitive advantage of any IR professional is to amplify the unique skillset and experience gained through working in IR, adds Zhang.
‘IR is different from most roles, with a limited population of experienced professionals,’ he points out. ‘Given this scarcity, IR professionals should develop and nurture the unique skillsets the role requires. These include effective messaging, advising senior management, developing relationships (both internal and external), navigating the political landscape and connecting the investor community with senior management.
‘IROs also need to perfect the processes that are unique to IR: earnings, investor Q&As, SEC filings, conferences, buy-side/sell-side engagement, and so on. The more IROs develop these unique skillsets, the bigger their competitive advantage.’
Richard Davies, RD:IR
Whether it’s tough for the recruiter, the candidate, or both, IR still continues to be a rewarding career choice, and one that is increasingly expanding in scope, says Davies.
‘IR remains a wonderfully complex, interesting and exciting profession that can be a job in itself or a springboard to other roles in business, including senior management,’ he says.
‘IROs should absolutely be more present at the executive level, driving the conversations with all stakeholders. IR is moving to a new phase of development with the integration of ESG into reporting and valuation, and digital IR should be viewed as a valuable opportunity.’
