The holiday season is fast approaching and invitations to work parties are being sent out. But for some companies, plans might not look how they usually do with a packed house, open bar and live music into the night.
A NerdWallet survey, which included 500 U.K. business owners and managers, found that 36% of businesses are stripping back on their Christmas parties this year to save on costs. In fact, 27% said they won’t be having a party at all. And of those who said they won’t be partying, 13% said they had to call it off due to financial reasons.
Many parties didn’t happen last holiday season, but that was due to another wave of Covid-19 that restricted people from gathering comfortably. This year, there are new challenges on top of the ongoing pandemic, including financial instability with a looming recession that experts say employers must be mindful of. Some industries are facing layoffs and hiring freezes, and in the midst of that, planning a lavish holiday party might not make sense for every company.
“I definitely wasn’t surprised when I first saw these results,” said Connor Campbell, NerdWallet’s business finance expert. “It just kind of makes sense sadly. If a business is looking at its bottom line, looking at skyrocketing expenses and bills, cutting back on Christmas is an easy way for a company to save money.”
However, there are real consequences that could come from canceling holiday parties. For instance, for a company that is largely remote, an in-person holiday party provides the opportunity for employees to get together in person. If that’s taken away, it might have negative effects on the company culture, and employees might not have that sense of community or feel appreciated.
“It chips away slightly at those interpersonal relationships,” said Campbell.
Campbell also pointed out another downside: Drawing back on these parties would be a clear indicator of the financial state that the company is in.
“Employees can pick up on if a company is in trouble, isn’t doing too well or has money concerns,” said Campbell. “Something like this, not having as lavish of a Christmas party, or not getting a Christmas bonus, or not doing all of the usual things, might send some alarm bells to employees and cause them to feel more anxious about their personal situation and the company situation.”
Aside from pulling back on holiday parties, the NerdWallet report also found that 42% of businesses will rein in spending on holiday decorations. Also, 32% of companies will be stripping back their Secret Santa activities, with 19% saying they won’t hold the gift-giving event at all this year.
Brice Jones, Freehold Hospitality co-founder and CEO, said he’s seen a similar drawback in holiday party spending. “We’ve seen a lot of those budgets been cut throughout the pandemic and all over hospitality,” said Jones. Freehold is only at about 75% capacity compared to pre-pandemic levels for company party bookings.
Last year was supposed to be big for Freehold, with companies planning parties further in advance than they ever had before. However, the Omicron variant of Covid-19 shuffled those plans, forcing many to reschedule to this year, meaning that many parties they will host will actually be events that were rescheduled. Jones said other operators in the industry experienced the same scheduling changes.
However, there are other holiday party trends are emerging this year. Jones said some company parties are shifting their focus from drinking and dancing to more activity-based events like trivia or a comedy show.
“You’re not seeing the 700-person holiday parties that you once saw,” said Jones. “You’re seeing much smaller team outings and individual groups, like 15 to 45 people, rather than the whole floor of a trading finance company.”
Smaller, intimate outings make such activities possible. Jones said while he hasn’t seen a decline in alcohol revenues, he’s seeing an increase in non-alcoholic revenues.
“It’s not about a bottle service night or what kind of wine you’re serving with dinner,” said Jones. “It’s more so offering a gaming component, for example.”
“We’re trying to bring people back together through games and getting to know each other on a deeper, more human level,” he continued. “Bosses have a better understanding that it’s the community an employee needs.”