As the economy continues to slump, many companies are entering the holiday season with tighter budgets and little reason to celebrate. As a result, fewer employers are planning holiday parties while others are slashing the party fund by as much as half, according to a new survey by Challenger.
In our annual survey on holiday parties, 77 percent of companies are planning holiday parties this year. That is down significantly from 2007, when 90 percent of employers were planning holiday parties despite mounting evidence of an impending slowdown.
Further evidence of the economic slowdown’s impact on employers is seen in the fact that seven percent of the companies surveyed typically hold holiday parties but were canceling them this year due to cost-cutting. In contrast, no company surveyed by Challenger in 2007 planned to cancel its holiday party.
The Challenger holiday party survey was conducted in October among approximately 100 human resource executives in a wide variety of industries nationwide.
The comparative data from this year to the last is very telling. The effects of the housing slump that began around August 2007 had not been fully realized when companies were planning year-end parties. With the impact of the housing collapse rippling throughout many sectors of the economy, we are seeing the toll on holiday parties
Eighty-three percent of survey respondents are spending the same amount on their parties this year. Only 4.3 percent of companies are increasing their party budgets this year, and by an average of only 5 percent, compared to 2007 when 38 percent allocated an average of 16 percent more for their parties. Among the 13 percent planning to reduce party spending, the budget cuts averaged 53 percent.
More than half of the employers holding parties are reportedly having it on a workday or near the end of a workday (57 percent), while nearly two-thirds are inviting employees only (65 percent). Fifty-six percent are using a caterer or outside service compared to 69 percent last year.
Despite this year’s focus on cost-containment, 65 percent of companies still plan to hold their functions at an offsite venue and 48 percent are planning on serving alcohol.
2008 Challenger Holiday Party Survey Results:
1. Will your company hold a holiday party this year?
Key: 2008 2007
Yes: 76.6% 90%
We never have holiday parties: 16.6% 10%
We usually do, but not this year due to cost cuts: 6.8% 0
2. Is your company budgeting more or less for a holiday party this year?
(Percentages are among those having parties.)
Budgeting Same: 82.7% 50%
Budgeting More: 4.3% 38%
Budgeting Less: 13.0% 12%
3. If you are having a party, can you share some of the following information, checking all those that apply? (Multiple answers are allowed)
Inviting employees only: 65.2% 46%
Using caterer, event planner, outside services: 56.5% 69%
Holding party during workday or end of workday: 56.5% 42%
Serving alcohol: 47.8% 46%
Inviting family/spouse/partner to attend: 34.8% 54%
Holding the party on company premises: 34.8% 27%
Holding party in evening or weekend: 30.4% 58%