As a growing number of companies benefit from a slowly improving economy, there are indications that workplace holiday parties are starting to make a comeback. However, with the bitter taste of cost-cutting measures still fresh in employees’ minds, some companies appear to be keeping festivities relatively subdued, according to a new survey and interviews with employers.

In its annual survey on holiday parties, global outplacement and business coaching firm Challenger, Gray & Christmas Inc. found that 64 percent of companies are planning holiday parties this year, up slightly from 62 percent a year ago. About 4 percent of those holding parties this year are doing so after one or more years with no party due to the recession.

The non-scientific survey of approximately 100 human resources professionals found that only 6 percent of those companies holding parties are planning to spend more this year. The majority of respondents (76 percent) said party budgets would be about the same as last year. Eighteen percent of companies are spending less, down from 29 percent a year ago.

“We are at a precarious stage in the recovery, where some companies are feeling it more than others. Many companies are still struggling. The corporate holiday party scene is going to vary greatly across the country and in different industries. New York City, in general, is rebounding faster than many other major cities, so parties there might be pretty extravagant. Tech companies on the West Coast are also doing well. But, overall, we are probably still a year or more away from a widespread return to the types of festivities held prior to the recession,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

In interviews with human resource professionals, Challenger found that some companies are still feeling the effects of the recession. Several indicated that they are still having parties, but noted that the parties would be fairly simple.

“It’s hard to justify the expense of a party when we are fighting to keep people’s jobs,” said a human resources executive from a New York-based consumer products company, which is still planning to have a party but budgeting less.

“This year, it will be in-house; a catered lunch with no alcohol. In the past, we had an offsite event with food and full bar,” he noted.

A Michigan automotive parts manufacturer also plans to go ahead with a holiday party, but like last year, its event will be scaled down from pre-recession levels.

“Prior to last year, we held an annual Christmas party off site for employees and spouses. Last year, we eliminated that and went to holding an employee lunch,” said a human resources representative of the company.

Interestingly, the Michigan company, along with some others, found that the scaled-back parties ended up being preferred by employees. “The employee lunch was well received and involved more of the employees than usual.”

A human resources executive from an East Coast animal health products company observed, “We scaled back holiday party in 2008 from an off-site event at an upscale restaurant to a more modest catered event at our own facility. Office is tastefully decorated and large hallway spaces are set up for conversations. Feedback is that this more simple approach is less intense and enables people to more easily connect and converse with one another.”

About 53 percent of companies having holiday parties are holding them on company premises. That is up from 29 percent in 2009. Nearly half (47 percent) are holding their events during or near the end of the workday and the majority (54 percent) are open to employees only.

“It’s not surprising that some companies found that scaled back parties are actually preferred by employees. There is a common perception that corporate holiday parties are raucous affairs where managers and their workers can cut loose. In reality, however, corporate parties can merely add another layer of stress to workers, who have to worry about getting too relaxed and saying or doing something that might offend a supervisor,” said Challenger.

“Some employees would just as soon skip the holiday party in favor of an extra paid vacation day or a little extra money in their year-end paycheck,” he added.

That is exactly what one company interviewed by Challenger decided to do this year. After holding a half-day catered party last year, the North American unit of a Swedish industrial products manufacturer decided to replace the party this year with $100 gift cards for each employee along with a half-day to go shopping. For the company, it was not a cost-saving measure, but simply a way to help its employees with holiday shopping.

While some employers are keeping events subdued, Challenger does see evidence that holiday parties are beginning to make a rebound. Energy XXI, a Houston-based oil & natural gas exploration and production company, has had a strong year and wants to celebrate its success with all of its employees. The company is budgeting twice as much as last year for its holiday party, using an event planner and holding it an outside venue. In the Chicago area, Teri Belgio of Naperville-based Belgio’s Catering noted in an e-mail that they have seen an increase in inquiries for the upcoming party season. While most of the caterer’s orders come in shortly after Thanksgiving, she said that people are indicating they are having parties again.

“For workers whose companies are holding parties this year, it is important to remember that there is a fine line between having fun and having too much fun. The economic recovery is still very fragile, so it is not the time to draw attention to oneself with embarrassing conduct at the holiday party,” said Challenger.

“However, employees should not simply stand in the corner in an effort to stay off the radar. It is equally important to remember that these events also offer great opportunities, such as socializing with senior executives who you do not interact with on a daily basis. Make an effort to break away from your comfort zone and introduce yourself to those who might help your career,” he advised.

 

GUIDELINES FOR OFFICE HOLIDAY PARTYGOERS

Arrive early: This might be your best opportunity to talk with senior executives while things are still relatively quiet.

Work the room: It is easy to simply socialize with the members of your department, with whom you work with day in and day out. However, you gain if you use this occasion to meet people in other departments. You never know who can help your career.

Do not over indulge: Free alcohol can quickly lead to excessive drinking. Stay in control. You do not want to do anything embarrassing to you or your employer. Even if your alcohol-induced actions do not get you fired, they could hurt your chances for advancement.

Be friendly, but not too friendly: The company party is not the place to try out your latest pick-up lines. The risk of such behavior being seen as sexual harassment is high.

Avoid talking business: This is not the time to approach your boss with a new business idea. Save that for Monday morning. Instead, find out about his or her interests outside of the office. Find a connection on a personal level. That connection will help you on Monday when you bring up the new idea and it could help when it comes time for salary reviews.

Attend other companies’ parties: Fifty-four percent of company parties are employees only. If a friend invites you to his or her company party, you should go. It is an opportunity to expand your professional network, which is critical in this era of downsizing and job switching.