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Partying During the Downturn

Company executives, HR people, and other managers face a difficult decision this year: to party or not to party. In the wake of recent layoffs, the prospect of possible future cuts, and as a reflection of the general trend toward corporate belt-tightening, many businesses are worried. Still, it’s not an easy call. Even in sectors that haven’t (so far) been affected by the downturn, a lavish display of holiday cheer seems in poor taste. Yet canceling all festivities may only compound employee feelings of uncertainty and despair.

So what to do? Some companies, including Hearst (publisher of Cosmopolitan, Esquire, SmartMoney, Popular Mechanics, and many other magazines), have canceled their holiday party plans outright. According to the Website Mediabistro.com, Hearst, which formerly treated staffers to an annual lavish holiday gathering at New York City’s Tavern on the Green, scaled back last year to an in-house party, and announced a no-party policy for 2008.

And ABC News president David Westin sent employees an e-mail stating, “We’ll forego all holiday parties this year. This means that the company parties in LA, NY, and DC are cancelled.”

Other companies have come up with creative, alternative ways of celebrating. Google employees will participate in small, team-based events such as spending an afternoon together volunteering, followed by an evening out in San Francisco. And in lieu of a holiday party this year, Viacom Inc. is giving employees two paid days off—in management’s words, “to relax and recharge for the coming year.”

According to Challenger, Gray & Christmas’s annual Holiday Party Survey, 77% of companies are planning holiday parties this year. However, that’s a significant decrease from last year, when 90% of employers said they would host a holiday celebration.

As further evidence of the economic slowdown’s impact, 7% of the companies Challenger surveyed that said they typically hold holiday parties were canceling them this year due to cost-cutting. In contrast, no company surveyed by Challenger in 2007 planned to cancel its holiday party.

John A. Challenger, CEO of the global outplacement firm, says, “With a few notable exceptions, many companies had already abandoned the extravagant parties that were common during the dot.com boom of the late 1990s. Even as the economy expanded following the 2001 recession, increasing scrutiny from shareholders, analysts, and the media, compelled companies to hold more low-key affairs. Now, with the economy teetering on the edge of recession, plans are becoming even more subdued with a growing percentage of companies indicating that parties will be held during the workday and open only to employees.”

Sherri Foxman, founder and Party Girl of Party411.com, offered the following advice on Vault.com for companies who want to treat their employees to a holiday party while keeping costs down:

  • If you can't hold the party in your office, consider a party room at a moderately priced restaurant like Country Buffet or Bonanza Steakhouse. Also, many McDonald's have huge party rooms. And they will let you decorate any way you please.
  • Or, find a reasonable rental space and contract with a low-priced catering agency.
  • Even if you use your usual corporate caterer, you can stick to less expensive menu items. Approach caterers with a firm budget in mind and let them build the menu around your budget. And make no apologies for a shrunken party budget this year.

 One caveat to all who attend the office holiday party: keep the emphasis on the “office” instead of the “party.” Sure, everyone’s worked hard all year and they deserve to have a good time, but those who want to have a job the day after the party will stay sober and act professionally at all times.