Companies are cutting IR budgets as they respond to disruption caused by Covid-19, according to new research.
Nearly half (45 percent) of IR professionals globally have either already experienced budget cuts or expect them in the coming months, finds Covid-19 and IR, a new report from IR Magazine.
Around the world, businesses are reining in costs as they seek to weather the financial impact of the virus, which has led to sharp falls in economic output and widespread job losses.
IR professionals in Asia report the biggest impact so far to their resources: 50 percent of respondents in this region say their budgets have fallen since the outbreak of Covid-19, compared with 28 percent in Europe and 24 percent in North America, according to the report.
IROs in Asia are also the most pessimistic about future resources, with 55 percent predicting budget cuts in the next few months. By contrast, just a third (33 percent) of IROs in North America and 29 percent in Europe expect budgets to fall.
While many IR teams have seen budget cuts, they are also likely to have lower costs – substantially lower, in some cases – given the inability of companies to travel to meet investors and analysts.
Respondents to the research were asked to name the biggest changes to their working practices stemming from Covid-19. Most IR professionals focused on working from home, the lack of travel and attending virtual events.
One survey respondent, the head of IR at a Swiss company, describes the main adjustments to working life this way: ‘Remote work, only virtual investor interaction, more ad-hoc requests, additional unforeseen projects to handle [and] limited working time due to home-schooling at same time.’
So far, company size appears to have had little impact on resource levels, with no significant difference to IR budgets across market caps, according to the report. IROs at companies of less than $5 bn in size, however, are more likely to expect budget cuts than their larger peers.
The drop in resources has not fed through to changes in IR team sizes, notes the report: just 2 percent of respondents have seen their team grow and 2 percent have seen it shrink since the start of the crisis.
The report is based on a survey of more than 180 members of IR Magazine’s research panel, which includes IR professionals, investors and sell-side analysts. The fieldwork was conducted between May 12 and May 21.
Click here to read the full report.