Challenger: Only 62 Percent of Companies to Have Holiday Parties This Year

Things may be a little less merry at the office this year. According to the annual Holiday Party Survey by Challenger, Gray & Christmas Inc., only 62 percent of companies plan to have holiday parties this year, down 15 percent from 2008 and 28 percent from 2007.

The survey, which drew on the responses of 100 human resources executives, also found that the companies that still plan to hold holiday parties are likely to change the format. Additionally, 29 percent responded that they will be budgeting less in 2009, compared to only 13 percent who decreased budgets in 2008.

In 2008, more companies were focused on maintaining budgets at the same level from the previous year (83 percent) while this year only 64 percent plan on keeping the budget the same in 2009.

Companies also seem less willing to lend office hours to festivities, as only 43 percent of companies will have parties during the workday or at the end of the workday this year, (down from 56 percent in 2008). Additionally, the parties are less likely to be held on company premises this year (29 percent) than last year (35 percent). Some say this has as much to do with appearances as budget constraints.

"Spending thousands of dollars would send an improper message to employees when there have been layoffs, pay cuts, no bonuses." said Jake Wengroff, Frost & Sullivan's Global Director of Corporate Communications. "There could be a small gesture of good faith, but not necessarily in the form of a holiday party."

Other trims include that 64 percent of companies will keep costs lower by inviting only employees. Though last year 57 percent used outside services to help run the party (i.e. caterers), only 36 percent will indulge this year.

Considering the challenges companies are facing, Wengroff suggests that most employees will understand these cuts and see them as small sacrifices.

"Not having holiday parties will not affect employee satisfaction. People will understand and respect this."

Source: Incentive Magazine