Once the cornerstone of the work social calendar, BETHANY WALES asks whether money saving measures and employees who’d rather be at home are spelling the end of the corporate Christmas party.
The festive season might be upon us, but for businesses, the cost of living crisis continues to bite.
And with budgets tightened across most industries, Christmas parties could be its latest victim.
Nearly a quarter (21pc) of small businesses have opted out of throwing a company shindig this year, with 23pc also ditching plans to give staff Christmas gifts, according to a study by corporate budgeting firm Pleo.
Many of those that are opting to celebrate as a company are doing so on smaller budgets, with medium sized business owners spending, on average, 24pc less on Christmas entertainment than they did last year.
But before you write this off as Scrooge-y behaviour on the part of business owners, it's worth noting that an increasing number of employees are turning their noses up at the idea of spending their precious time off making merry with their colleagues.
CULTURAL SHIFTS
A recent study by Norwich-based finance company NerdWallet revealed that one in four of us are planning to skip the office party, with personal finances listed as the most common limiting factor.
In East Anglia, 40pc of those choosing to stay home said they couldn’t afford to attend, with cost factors like child care, transport, and parking adding to the expense.
For younger employees, not being able to afford an appropriate outfit is the main motivation for skipping out, with one in five under 25s citing this as their main concern.
Lizzie Dring is a professional events organiser in East Anglia whose company Huxley Events specialises in corporate celebrations.
She said that although budget restrictions are playing a key role in cancelling events this year, office parties as we know them have been on the decline for the past decade.
She said: “The culture around this stuff has really changed.
“Whereas people used to be up for getting drunk around their colleagues, people are now a lot more concerned with being professional.
“More and more I’m being approached by bosses who would like to throw a festive event for their employees, but don’t want alcohol to be the central activity.
“Younger employees especially are less into drinking, so we’re always helping people find more inclusive alternatives.”
Instead, Ms Dring said employers were looking for creative alternatives, with activities like escape rooms, GPS treasure hunts, and virtual reality games the most popular.
She added: “Companies are also choosing to throw their celebrations during work hours to encourage more people to come.
“That way they’re not having to pay out for childcare costs or hotels like they might opt to do for an out-of-hours event.”
TWO EXTREMES
While many businesses are opting to scale down or cancel Christmas parties, some sectors are doubling down on the celebrations.
Ms Dring said she was seeing “extreme approaches at both ends”, with those working in the tech and telecoms industry spending record amounts on extracurricular activities for their staff.
She said: “In the industries that are doing very well business-wise we’re seeing company owners looking to reward their staff and create a desirable culture to attract new hires.
"Firms with lots of virtual employees are also keen to use the Christmas party as a way to get everyone together.
"They have the added advantage of fewer overheads - the money they save on office space and utilities can go towards a celebration.
“That being said, because so many other businesses are struggling at the moment we’re seeing they’re more reluctant to talk about it publicly.
“They’re aware of being insensitive to those in less fortunate positions - they don’t want to appear out of touch with the rest of the world.”
Even for companies that want to splash the cash on Christmas celebrations, Ms Dring said there is a common cut-off point on per-person spending.
She said: “The costs of providing staff entertainment are fully tax deductible and VAT can be recovered.
“However, there is a cap of £150 per employee which applies only from a benefit in kind perspective.
“If you spend more than £150 per employee on staff entertainment then the occasion which breaches the threshold, and subsequent events, will be taxable on the employee as a benefit in kind.”
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