It is well understood that the typical chief executive officer needs to constantly be thinking about the present and future direction of the company. The state of the economy and interest rates weigh on decisions of capital expenditure. Research from a marketing department may change the course of a product. However, it is not common knowledge that U.S. election cycles may cause consternation for the average CEO. In fact, according to a recent study completed in October, three quarters of executives expect that the current mid-term elections will affect the future hiring at their companies. Of the same group about a quarter stated the ramifications would be significant. Politics is an impassioned topic and the survey found that 60 percent of executives think political conversations have made a more divisive workplace in recent years.
The polarizing political climate has worked its way into the boardroom, with executives paying sharp attention to elections. A recent op-ed in The Hill from Nels Olson of Korn Ferry explored the topic in more depth. Because hiring has a strong correlation with the outlook of a company’s growth, it makes sense for a CEO to anticipate election results. Hiring could be increased if business leaders anticipate the government will pursue policies that promote economic growth. Alternatively, a noteworthy downward move in the economic trend could slow hiring.
There is no doubt that changes in the government, such as the reallocation of seats in the U.S. Congress or new government officials, can have an impact on corporate America. The consequences appear not just in hiring plans, but also in anticipated changes to laws, regulations and government policies.
Even with the turmoil that bubbles up during political election cycles, any good business leader knows that a company needs a long-term strategy, not one dictated by ever-changing politics. The fundamentals of business are what propel decision making. Despite all the uncertainty surrounding the mid-term elections, the most recent jobs report showed a significant increase in payrolls, with 250,000 jobs added in October. This shows that business executives are looking past the current political climate and continue to navigate the long-term courses of their companies.
Still, it cannot be denied that elections, with the political rhetoric and media circus surrounding them, are at least a distraction for executives. Moreover, the duration of election cycles has increased in recent years, making the ability to ride the waves of political uncertainty a required skill for the modern-day business executive.