The One Word Leaders Dare Not Speak

“A little disturbance.”  “A detox period.”  “Economic transition.” Can you think of any more euphemisms?

Though the threat of a recession has come and gone in waves over the past couple of years, economists are fretting that a downturn is looking more and more likely. Earlier this week, a major investment bank raised its outlook for a recession to 35% from 20%; this was only the latest indication that inflation, interest rates, declining consumer spending, and unemployment are eroding the economy. Sweeping tariffs are about to take effect, and in the stock market, both the Nasdaq and S&P 500 endured their biggest quarterly declines since 2022.

But the greater the chances of a recession, it seems, the less often business leaders are saying the R-word. Only thirteen S&P 500 companies used the term “recession” on earnings calls from December to early March, well below the five-year average of 80 per quarter, and the lowest total since the first quarter of 2018. Instead, business leaders have taken to using a veritable thesaurus of other terms, including  “hard landing” or “strong headwinds.” “Leaders can be pretty creative about messaging what they are going through without overtly saying it,” says Peter McDermott, sector leader and head of the Corporate Affairs practice in North America for Korn Ferry.

But leaders aren’t simply being cagey, says Meredith Moot, a senior client partner in the Global Industrial practice at Korn Ferry. They have legitimate financial and business reasons for choosing their words carefully. “There is incredible weight given to a leader’s comments,” she says. Investors could start selling off stock, for instance, and drive share prices down. A social-media post could go viral, bringing unwanted media attention. Businesses could cut investments and consumers could pull back even further on spending. Employees could start looking for jobs, or hiring could become more difficult. “Euphemisms that use words like ‘transition’ or ‘period’ are more fluid, and give leaders flexibility,” says Moot.

Much of the sudden change and unpredictability, from tariffs to market shifts, may be forcing leaders to resort to creative terminology, says Matt Bohn, a senior client partner in the Technology practice at Korn Ferry. As Bohn notes, the performance of the US economy hasn’t yet met the National Bureau of Economic Research’s formal definition of a recession—two consecutive quarters of negative GDP growth—and, in any case, there’s always a lag, because the organization declares both recessions and recoveries retroactively. “Firms are grappling with the impact of recent decisions and what to do,” says Bohn.

Globally, the outlook remains shaky too, but many leaders in Europe might be avoiding the R-word because they don’t see one looming. “I would say we have different industries and different sectors, and even inside the same sectors we have different behaviors,” says Philippe Remy, Korn Ferry’s managing director for France.

McDermott says using coded language is nothing new in business, noting, for example, that companies often use the euphemism “restructuring” when they’re going through bankruptcy. To be sure, he says, the phrase “Great Recession” came to prominence during the pandemic in part because leaders wanted to ease people’s fears of a possible depression. But in this instance, he says, business leaders may be following the example of government leaders, who have similarly avoided the R-word. “Leaders have learned it’s wise to follow others’ lead,” says McDermott. 

Learn more about Korn Ferry’s Leadership and Professional Development capabilities.

Read more This Week in Leadership articles