While the majority of companies will serve up some seasonal cheer at holiday office parties this year, the share of companies preparing to party is hovering just under a pre–pandemic low last seen in 2009, according to the findings of a Challenger Gray & Christmas survey.
The percentage of companies reporting in-person end-of-year parties this year jumped to 56.9% compared to 26.6% last year, when concerns about COVID-19 prompted many companies to skip them, according to respondents representing 252 U.S.-based companies of various sizes and across industries who participated in the online survey in October and November.
The last time fewer than 65% of companies were planning for end-of-year gatherings was in 2009, when just 62% of employers were hosting events in the wake of the housing crisis-fueled recession. The findings suggest that the easing of pandemic worries and the urge to bring employees back together is being offset by economic concerns that are damping some companies’ holiday spirit.
“Companies are willing to spend on their workers this year and get them together in-person for the holidays, but they are expecting tough times ahead, certainly,” according to an emailed statement to CFO Dive from a spokesperson for Challenger, a global outplacement and business and executive coaching firm.
For example, less than a quarter of technology companies said they would hold a holiday party this year with 17% citing economic conditions as the reason to skip the celebration, the survey found. The tech industry has announced 80,978 job cuts through November, up more than five-fold from the same period last year, according to the report.
At the same time, 26.61% of companies surveyed in the 2022 study said their business condition outlook has worsened year-over-year, rising from only 9.84% last year.
Still, there are companies who are budgeting to stick with the tradition. When it comes to retaining and keeping talent in the current strong labor market, that may be because the partying is much more than a chance to wear velvet and sequins.
“The holiday party has always been a way for companies to show their teams they value them. Creating a space for employees to have fun together bolsters morale and connection to their employers and their work, so it really is an important retention and leadership tool for employers,” Andrew Challenger, senior vice president of Challenger, said in a statement, noting that employers are cognizant that their teams are wrestling with burnout and may be on the verge of quitting.
Indeed, CFOs whose firms are throwing parties appear to be funding a little more fun this year, according to the findings. While 37% of companies are holding party budgets steady compared to 2021, 16% are spending more on celebrations and only 6% reported they are trimming spending.
Likewise, more companies plan to hire an outside vendor/caterer and to serve alcohol than even before the pandemic. And more employers are also holding their events at outside venues. “It looks like companies are splurging on the parties, perhaps in anticipation of tightening spending in the months ahead,” the spokesperson wrote.