According to Korn Ferry, an organization consulting firm, as the US Presidential election nears and the race becomes more tight, many business leaders delay making key decisions till after November.
Companies are waiting to see more details from the presidential candidates, former President Donald Trump and vice president Kamalah Harris.
Korn Ferry says that the uncertainty surrounding elections has contributed to a drop in mergers during the last two years. The US revised down its estimate of job creation for July 2024 by more than 800,000.
While the outcome of elections is uncertain, companies are also reluctant to invest in new technology or recruit employees.
Alan Guarino is Vice Chair of Korn Ferry’s CEO and Board Services Practice. He noted that executives want to know the positions taken by candidates, but they need more specific policy details before making strategic choices.
“He said”
The C-Suite needs clarity to be able to plan.
Trade policies and corporate tax rates are key issues.
The policies affecting trade, corporate taxes, antitrust laws, healthcare costs, and other issues are of particular interest to business leaders.
The leaders are aware that tariffs and embargoes can have a negative impact on the supply chain. And, as the prices of goods are beginning to fall, they are concerned about the supply chain, no matter who is elected.
Nels Olson is the global head of government affairs for the company. He said that many “key issues” like these are yet to be resolved, highlighting the insecurity gripping several industries.
In July, the decline in mergers and the addition of new jobs reflects a pattern of declining investment as a result high levels of political uncertainty.
Before hiring, you need to be confident in the economic situation
In the short term, uncertainty paralyzes business decision-making.
While awaiting election results, companies are reluctant to invest in new technology or recruit employees.
Jane Edison Stevenson is the global vice-chair of Korn Ferry’s board and CEO Services practice. She said companies must have confidence in the economy to move forward.
She says that after nearly two years of preparing for the recession, businesses need to be confident the economy will continue in the direction they want before they begin hiring again.
The first year in a president’s tenure is usually the one with the greatest impact on policy, especially if the president has a party that controls Congress.
Olson says that the new policy could have a profound impact on business in 2025. Companies will need to quickly adapt to these changes.
He encourages companies to take a proactive approach:
Companies must be prepared to defend or promote their position in the face of different scenarios.
Korn Ferry’s forecasting may change as new information becomes available.
