Global IR budgets stand at an average of $335,000 in 2021, according to the latest IR Magazine Global Investor Relations Practice Report. This represents a 2 percent increase on last year’s figure of $329,000 and a stabilization of budgets following a fall of 16 percent in 2020.
While the drop in IR budgets at the start of the pandemic was dramatic, it was also part of a long-term trend. Before the latest figures, budgets had been shrinking year on year from a high of almost half a million dollars in 2015 – meaning they had been cut by more than a third in five years.
Looking at IR budgets in each region provides a balanced picture. Budgets in North America and Europe have continued to fall through 2021, although far less dramatically than they did at the onset of the pandemic. The slight increase in budgets overall is down to the increases seen in Asia and the rest of the world.
Similarly, the situation is mixed when viewed by company size. Small and large-cap companies have witnessed a decrease in IR budgets while mid-caps and mega-caps have seen their budgets improve.
The fact that IR budgets have stopped falling globally is welcome news, particularly in the middle of a pandemic. But it is important not to read too much into the overall increase this year. Fortunes vary according to region and company size and the increases witnessed this year may be a correction from the overly frugal cuts in 2020 rather than a reversal in long-term trends.
The figures for IR budgets in this research do not include travel budgets and so are not directly affected by companies staying at home during this time. But the lack of travel is sure to have an indirect effect on IR budget plans.
Further research from IR Magazine this year across a number of reports has shown that Covid-19 has not only dramatically changed IR practice in the course of the pandemic, but is also expected to have lasting long-term effects. According to IR Magazine’s 2021 report into Covid-19, an overwhelming 85 percent of IROs believe it will lead to a permanent change in working practices.
Such changes to the execution of IR will inevitably lead to a revision of IR budgets. The fact that IR budgets have relatively stabilized over the course of the pandemic has provided a more promising platform for future budget adjustments to take place.
The full IR Magazine Global Investor Relations Practice Report is available to Advanced subscribers of IR Magazine, while a global overview of the report is available to Essentials subscribers.
