Politics Does Matter in Business

I know that I've written before that politics is something you don't want to talk about with clients.

dont-talk-politics

Having said that please understand that elections still have a huge impact on businesses and hiring.

September and October is the time of the election year when job recs get put on hold, sales contracts are held up, and things kind of halt for a few weeks.

The points below are lessons I've learned over the last 25 years meeting with thousands of companies of all sizes and shapes and run by people of all backgrounds and beliefs. They all have the following in common when it comes to hiring and politics. These findings apply no matter who is running, who wins, when the election day is, and if the race is local, statewide, or national.

1. All companies have operation plans set up deal with whoever wins

In an election year all of the above slows to a crawl once September starts. Decisions are put off until after the election. Everyone gets gun shy about who might win. People panic and think the world will end immediately if person X or Y gets elected. They hedge their bets and wait to see who wins. Smart companies have plans on how they will operate if the plans of elected official X or Y get implemented. There is also a matter of actually seeing if a person will govern on the same promises they ran on. Remember candidates run in primaries to attract the extreme of their parties. Once they are the nominee they run to the middle in order to appeal to the most voters. Companies know this and shouldn't get too excited about the hype in the commercials played by the candidates or their opponents.

How they govern once elected is what makes the uncertainty for the company.

It's logical. Companies don't want to commit to package A that will benefit them if the polices of official X gets elected but will not benefit if official Y gets elected. So they have to wait and see who wins and how they will govern so they will not have wasted a lot of time and money.

2. New hiring usually gets put on hold

Every November of every even numbered year we have an election for 1/2 of the congress and every fourth November for president.

Hiring and buying decisions always start to go on hold in September or October.

Companies don't want to hire people only to see the policies of candidate X or Y causing them to fire those people a few months down the road.

September is usually a good month for hiring because everyone is back from summer vacation, school starts, college kids leave their summer jobs, the Christmas retail season starts reving up. In odd numbered years these good times usually last through October and sometimes later as retail hiring picks up as other hiring slows down. Companies will still hire to replace key positions but during this time the process usually takes a little loner even for essential positions.

3. Companies might play it safe and hold the rest of the budget to see what happens so they don't spend as freely

Companies still usually have a chunk of budget available and can commit to a package for equipment or a person before the end of October or even up to Thanksgiving and through December if it is an annual contract or something that is required for business. In an election year they might decide to wait a little longer for anything else before making the decision. See point one.

4. Companies hate uncertainty

Regular elections cause enough uncertainty.

Recall elections, special elections, elections held outside of their normal times confuse and frustrate businesses and hiring because of the uncertainty of what is going to happen. 

In Wisconsin during 2011-2012 we went though two years of recalling every elected official and judge possible because one party or the other was ticked off.

Companies didn't know what to do because as soon as one election was over and companies thought they knew what was going to happen, another group of recall elections were scheduled for another group of politicians and that brought uncertainty back immediately into the market. Instead of signing contracts or hiring people, decisions were put off until after the elections again.

5. Decisions by activist judges impact companies create confusion

According to what I learned about the branches of government in social studies back in grade school, the judges of the judicial branch interpret the law (congress makes them, the executive branch enforces them). Judges do not make the laws and are supposed to be impartial.

Unfortunately we live in a world where judges are now biased toward one political party or another and that colors their interpretation of laws. 

As an example look at Act 10 passed in Wisconsin (I'm not going to recount what the bill was about except to say the debate about it caused a lot of turmoil for everyone in Wisconsin but in the end benefited greatly the organizations that used it). The bill was passed and there were protests. A Madison judge struck the law down. There was a period of uncertainty while the bill made its way through the courts. When the bill was declared constitutional by the Wisconsin Supreme Court and then the US Supreme Court and made legal, businesses acted based on that law. A year later another Madison judge struck down the law again. Employers and businesses who acted under that law while it was legal suddenly don't know if they have to reverse what they did during the time the bill was legal. In 2025 the law is back in front of the Wisconsin Supreme Court because elections swung the political balance of the court opposite of what it was 13 years ago. It's a confusing mess. 

Companies execute their business plans by these rules. Lawsuits are filed by people against the rules. Judges suspended those rules. Now companies don't know if they should continue to play by those rules or go back to the old rules. 

What do they have to do about employees hired under new rules? If the new rules are found to be legal, then what does a company have to do about people hired under the old laws that they had to revert to following the invalidation of the new laws but before the new laws were declared legal again? Confused? 

So are the companies because now companies don't know if they should still follow the rule of law as it is currently or do they wait until the court rules. In the meantime contracts are held up and people aren't put to work.

6. Confusion reigns again and slows down hiring and buying decisions

As salespeople and recruiters we have to plan for uncertainty in election years and understand that they will effect our sales and hiring no matter what you do.
That there will be uncertainty during election times is the only certainty you can count on. You will get frustrated waiting for people to make decisions. Count on it.

The above thoughts are those of mine and are only observations and not meant to be an endorsement or implication of any political party, leaders, candidates, or anything else so don't imply that they are.

Wow. What does it say about our political climate that I even have to write that?

Go Vote!

I'm Ev, A Heck of A Nice Guy and I approve this message.