IR outsourcing on the rise as headcounts fall in North America

North American investor relations departments are spending almost $200,000 a year on outsourcing – accounting for 30 percent of total budgets, reveals the latest IR Magazine Global Practice Report.

Looking at IR trends across North America, Europe and Asia, the report finds North Americans are spending the most on external IR services, both in real terms and as a percentage of overall budgets. The average North American IR department headcount fell from 3.3 people last year to 2.8 in 2012, but increased outsourcing has helped support in-house teams, as departments increased spending from 25 percent of total budgets in 2011 to 30 percent this year.

IR teams across the region favor outsourcing conference calls, with half of companies choosing an external IR provider for the task. The IR web page and perception studies follow in second and third place, respectively. This is in contrast to the global trend, where shareholder ID and share register analysis are the most popular activities to outsource.

While the North American increase in outsourcing reflects the global average, with Europe also spending more, Asia goes against the trend with a $19,000 cut in real terms to external IR – even though IR departments in the region are seeing the same 0.5 drop in headcounts as their North American counterparts.

Globally, $26,000 has been added to external IR spending – accounting for 30 percent of the overall budget figure and an increase on the 25 percent that was spent in 2011.