Is a holiday party reasonable for your organization?

2003. Sixty-eight percent of companies planned to host holiday parties in 2003, according to the 2003 2003 Holiday Bonus and Gift Study conducted by Hewitt Associates LLC. Of these, 29 percent of organizations planned to spend $5,000 or less on their holiday parties, 20 percent planned to pay between $5,000 and $10,000, and 20 percent expected to spend from $10,000 to $20,000. The median amount a company expected to pay for a holiday party in 2003 was $11,050.

2002. In 2002, many companies waited until the very last minute to decide whether to hold any type of holiday function, a survey by international outplacement firm Challenger, Gray & Christmas, Inc., found. Many companies struggled to justify the expense of a holiday party after multiple rounds of job cuts, evaporating consumer confidence and no significant capital spending to spark a turnaround. What did those organizations eventually plan?

Some companies cut costs, selecting less expensive menu items or eliminating the lengthy (and more expensive) sit-down dinners in favor of casual receptions that last just one to two hours. Others moved their parties to the lunch hour, possibly because of their smaller budgets. In most cases, holding a lunch-time holiday event precludes the need to serve alcohol, a major cost savings. Another event option that was popular instead of dinners was a shorter cocktail or social reception. Some party venues offered unique options, for example, a single-evening event where numerous small groups (ranging anywhere from 50 to 200) were booked for one large, communal party. This allowed even smaller organizations to host a holiday gathering for their employees while holding the line on costs, which are spread among a number of firms

Morale booster or bust? While budget may be the overriding concern for most organizations, some also worried about the message they were sending by holding a holiday event. While generally considered a morale booster, it could backfire, especially if the organization had just announced major job cuts. Employees may be offended at being invited to celebrate the season while former coworkers are left jobless. In such situations, John A. Challenger, CEO of Challenger, Gray & Christmas suggested that companies would be better off by eliminating the holiday party altogether and giving employees a full-day or half-day of paid vacation time.