Israel has proven that it knows how to mobilize. Since October 7, reservists have reported for duty in extraordinary numbers, businesses have adapted under fire, and the economy has continued to function despite uncertainty and sustained pressure.
But as the conflict expands into a prolonged, multifront war, an uncomfortable truth is becoming harder to ignore: our economic response is still structured for short “rounds,” not for a campaign of duration.
The current compensation framework remains largely tactical – reimbursement for reserve duty days, targeted payments for direct damage, temporary regulatory relief. That model may be appropriate for limited escalations. It is inadequate for a prolonged war.
A long war does not only damage physical infrastructure. It erodes managerial continuity.
When CEOs and senior executives are repeatedly called up for extended reserve duty, the effect goes far beyond daily wages reimbursed by the National Insurance Institute. Strategic decisions are postponed. Investments are delayed. Hiring plans are frozen. Mergers stall. Boards operate cautiously. Over time, this creates a quiet but measurable slowdown.
CEOs, senior leaders are absent from companies
This is not theoretical. Since October, I have served more than 200 days in reserve duty and have now been called up again. At the same time, through my work advising dozens of public companies, I see the same pattern: executive teams operating for months with a CEO or senior leader intermittently absent, decision-making stretched across uncertainty, and organizations functioning in a mode of sustained caution.
The current model compensates the individual employee. It does not compensate the organization as a system. It covers lost wages but not leadership erosion. It recognizes direct physical damage but not structural managerial strain.
Even Israel’s original Reserve Service Law was designed for short, concentrated emergencies. In today’s reality of recurring call-ups over many months, its underlying assumptions are increasingly outdated.
If Israel recognizes that it is engaged in a long campaign, then its economic tools must reflect that reality.
What would that look like?
First, a dedicated compensation track for companies where senior management call-ups exceed a defined threshold – for example, 10% or more of executive leadership. Temporary tax credits in the range of 5%-10% on senior management payroll during extended reserve periods would acknowledge systemic disruption rather than only individual absence.
Second, automatic deferrals of regulatory payments and government fees for firms officially classified as operating under prolonged managerial disruption – similar to measures adopted during the COVID-19 crisis, but tailored to the current security environment.
Third, the establishment of a government-private fund to provide subsidized bridge loans to businesses directly affected by security-driven supply chain disruptions.
Fourth, preferential consideration in government and state-owned company tenders for firms carrying a significant reserve-duty burden within their workforce – recognizing that these companies contribute to national security not only through taxes but through human capital.
At the same time, incentives should encourage companies to invest in leadership continuity: strengthening middle management, building decentralized decision-making capacity, and training backup leadership structures. Managerial depth is not merely a corporate advantage; it is a national resilience asset.
This is not simply a business issue. It is a macroeconomic one.
Cumulative leadership erosion translates into lower productivity, delayed capital expenditure, and heightened caution in financial markets. Israel’s credit rating is influenced not only by fiscal deficits and defense spending but also by the economy’s ability to sustain growth under prolonged stress. Investor confidence depends on predictability. If structural strain quietly accumulates beneath a facade of business as usual, markets will eventually respond.
For many in the Diaspora watching Israel closely, economic resilience is part of the broader story of national strength. Sustained growth, stable institutions, and responsible economic policy are as critical to long-term security as military capability.
This is not a call to reduce the burden of reserve service. On the contrary. We will continue to report for duty and fulfill our missions as required. Precisely because that commitment is nonnegotiable, the economic framework must evolve to support the businesses that form the backbone of Israel’s civilian front.
Resilience is not a substitute for policy.
If the war is long, the response must be long-term as well. Israel cannot fight a prolonged war with short-term tools.
It is time to update the model.
The writer is CEO of Good Vision, part of Grant Thornton Israel, and author of Corporate Responsibility 2.0.