NEWS ANALYSIS: Finance skills shortage hits home

The managing director of training company Finance Talking says it often has to run courses in basic maths for its students. With financial PR booming and communicators in demand, this reflects a serious skills vacuum.

How can Sainsbury’s pension deficit can be £500m one minute and £3bn the next? Helping junior financial PRs make – ‘Eureka!’ – sense of such issues is what makes training so rewarding.

But as deals and decision-making turn more complex, the current lack of skills begins to bite – this despite the fact that both financial PR and investor relations are thriving.

PR people used to have it easier. The finance director looked after financials and press coverage would duly appear in the financial press to be read by private investors and a small specialist audience of fund managers.

As markets became more sophisticated, financial PR came to rely on other sectors to supply the necessary skills. A well-trodden path was from financial journalism, with many City hacks making the transition to in-house and agency roles.

Lured from the City
Others would have joined investment banks or stockbrokers on graduation, lured by the glamour of the City, then deciding after two years of 80-hour weeks that it was not for them.

But the leap from banking or journalism straight into financial and corporate PR is no longer so straightforward.

Investor relations particularly has become far more complex since the tightening of regulatory controls on both sides of the Atlantic.

Both agencies and companies find that premium is now on properly-trained and experienced individuals, to the extent that many companies now prefer that their financial PROs hold a CFA (see below).

Heather McGregor, MD of specialist communications headhunter – and our sister company – Taylor Bennett, says her recruiters could place three times the number of candidates than they do now. “We have seen salary levels becoming inflated by increased capital market activity since 2004, along with a shortage of trained and experienced people,” says McGregor.

Taylor Bennett will publish research into salaries in corporate and financial PR agencies later this year.The problem isn’t just a need for more training. The dearth of recruits goes back to the recession triggered by the dotcom bubble burst of 2000.

Both PR agencies and investment banks stopped hiring – especially at entry level – and the main training grounds for fledgling financial PR people disappeared. Some firms even started to shed staff.

Times were tough for those left behind, but crucially, the new talent wasn’t being hired or trained and the fallout is being felt acutely today.

(At FinanceTalking, between 2001 and 2004, for the first time we saw our training courses populated almost exclusively by companies as agencies axed to their training budgets. )

Where are senior financial PR people coming from today? Agencies like Brunswick and Finsbury have looked to broadcasting, politics and general PR. Andrew Hood and Simon Moyse, partners at Brunswick and Finsbury respectively, both started life in the political arena, while Brunswick partner David Yelland used to edit The Sun.

Elsewhere, keen, intelligent juniors are recruited fresh out of university or from largely unrelated jobs (we have come across teachers and translators). These new entrants often choose PR first and “financial” second. (Our courses frequently have to cover percentages for the mathematically challenged.)

Speaking the language
But it’s tough to go into financial PR without a relevant background. Most of your audience will be steeped in all things financial. Conversations will be about strategy, valuation, what the accounts are saying and how analysts arrive at profit expectations.

Then there is the ever-changing regulatory scene – what you can and cannot say and to whom, the impact of hedge funds and the growing trend towards shareholder activism. Conversations will generally be held at board level. It is a real challenge for overstretched senior staff to give newcomers the traditional on-the-job training that they so badly need – or time off for formal training.

There is no question that financial literacy is necessary. In communications, credibility is crucial. Clients will accept what you’re telling them; journalists will take you seriously; in-house, your internal audience will co-operate – otherwise there’s a good chance they will bypass you. These days it’s clear that you are simply more credible if you can talk numbers. And if you can do that already, it gives you a headstart.

“We’d like to see more accountants moving into communications,” says McGregor, “but otherwise, we need a clearer commitment to quality financial training. Training now tends be too little, too condensed and fragmented.”

In the cycle of City fortunes, things are looking good. Global M&A activity has topped $1,000bn (£590bn) in the first quarter of this year, driven by private equity, ambitious chief executives and cheap finance. Buyout fever is set to continue for at least another year and top-quality corporate communicators have never been so in demand.

Especially the financially savvy ones.

Courses and qualifications for financial PROs

1. Chartered Financial Analyst (CFA)
The standard for the professional investment community. Even passing level one (of three) would be sure to improve your CV. www.cfainstitute.org

2. Chartered Management Accountant (CIMA)
Can be obtained while working. www.cimaglobal.com

3. Chartered Accountant (ACA)
A big commitment; you would train full-time to be an accountant. www.icaew.co.uk

4. Certificate in Investor Relations
The IR Society’s qualification. www.irs.org.uk

5. Introduction to global financial markets, financial PR and investor relations. www.financetalking.com

Compiled by Heather McGregor, communications headhunter, Taylor Bennett

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