As Politics Divide America, Can Businesses Keep It Together?

With a highly contentious presidential election looming and controversial issues such as abortion and transgender rights being decided on a state-by-state basis, the political climate in America is sharply divided.

As an organizational behavior scholar, Manning School of Business Prof. of Management Kimberly Merriman has seen that politics are increasingly driving where employees want to live, particularly in the post-pandemic era of remote work.

In her recent MIT Sloan Management Review article, “The Politics of Place and What It Means for Talent Strategy,” Merriman examines how companies are managing “red” and “blue” tensions and offers ways in which business leaders can attract and retain talent in a fractured political environment.

“For years, your identity was tied to your job or the company you worked for,” Merriman says. “But the reality of the workplace now is there’s more contingent workers than ever, more on-demand workers than ever, so it’s silly to think that workers are identifying with their workplace. For many workers, their identity is tied to their place — their community or their city.”

During the pandemic, Merriman and a team of Manning researchers explored how remote work was changing the job market. In a sample of 1,300 people who moved or planned to move because of their newfound flexibility, Merriman says almost 25% cited political climate as a factor in their decision.

“It wasn’t just liberals moving to more liberal areas; it went in both directions,” she says. “And it was even separate from party affiliation. A number of people talked about how they were tired of the incompetence of their local leaders.” 

A survey conducted last December by real estate company Redfin showed that one in three real estate agents worked with clients in 2023 who had relocated due to local laws or politics — which was consistent with what Merriman saw during her pandemic research. That spurred her to pose the question for her Sloan Management Review article: “What are companies doing about it?”

One strategy, she says, is to separate organizational identity from politics.

In 2021, Basecamp, a project management software company based in Chicago, announced a controversial policy prohibiting employees from discussing political or social issues in online company forums. While some employees left because of the policy, Merriman notes that it remains in the code of conduct and that the company “has done well in the long run.”

When Pella Corp., a window and door manufacturer based in the politically conservative city of Pella, Iowa, opened a satellite office in Des Moines, Iowa, in 2019, Merriman found that nearly 100 of its 600 employees relocated to the more diverse metro area.

“Their focus is, ‘If we want to hire talent, we need to keep the political climate more neutral and inclusive.’ And it’s working for them,” says Merriman, who points out that Newsweek included Pella among “America’s Greatest Workplaces for Diversity” in 2023.

Another strategy is to influence local politics.

Merriman cites the example of cloud-based software company Salesforce, whose CEO, Marc Benioff, publicly opposed Indiana’s 2015 Religious Freedom Restoration Act. Not only did Benioff call attention to the act’s potential for discrimination against LGBTQ+ individuals, but Salesforce offered to relocate Indiana-based employees who felt at odds with the legislation. 

“The more (research) I do, the more I see this common theme about how we feel about the places where we’re spending time.” -Management Prof. Kimberly Merriman

“They put talent first, and one way was to influence the political atmosphere so employees can feel that they belong,” says Merriman, who notes that Salesforce’s efforts led to an amendment to the act that explicitly prohibits discrimination based on sexual orientation and gender identity.

A third strategy is for companies to relocate their headquarters from red or blue enclaves to “purple” places such as Austin, Texas; Nashville, Tennessee; and Miami. While this can neutralize political tension, Merriman says it’s not without risk.

Global asset management company AllianceBernstein relocated its 1,000 employees from Manhattan to Nashville in 2022, saving the company $80 million annually, but also removing it from the deep financial talent pool on Wall Street.

“Cost-cutting is not a bad reason to move, but it indicates you're not leading with a talent-management strategy,” says Merriman, who found that AllianceBernstein employees “were worried about their long-term career prospects because they were isolated from the cluster of financial businesses.”

On the other hand, Merriman says financial services company Citadel “did it really well” by giving employees the option of remaining in Chicago when it relocated its headquarters to Miami in 2022.

While people may feel like they can be their “authentic self” when they identify with their place, Merriman says they also run the risk of becoming trapped in a political bubble.

“When you're with people who are like you, your views tend to escalate and you have groupthink, which is not a good thing,” she says. “That’s why universities play such an important role. We expose students to different views and people from different places. They gain an understanding of each other, which is an eye-opening experience.”

Merriman is continuing her research on the politics of place this summer. She is conducting a survey with UML’s Center for Public Opinion on the personality traits that people attribute to states with a clear political affiliation — and how one’s own political affiliation affects that subjective perspective.

She and Asst. Prof. of Management Tamara Montag-Smit, along with two Ph.D. students, are also looking at how biophilic design — an architectural approach that incorporates natural elements into buildings and interiors — attracts people to a workplace.

“I’ve been doing these pockets of research over the past several years, and it was hard to link them together,” Merriman says. “But the more I do, the more I see this common theme about how we feel about the places where we’re spending time.”