updated 11/22/2006 3:55:20 PM ET 2006-11-22T20:55:20

Despite a bleaker economic outlook, employers are getting into the holiday spirit this year like never before, by boosting the number, size, and budget of year-end office parties, recent surveys show.

Of more than 100 businesses surveyed nationwide, 94 percent said they were planning some kind of year-end bash, up 7 percent from 2005, according to Battalia Winston International, a New York-based executive-recruiting firm.

The firm went so far as to warn of a general drop in productivity during the week of Dec. 11, when more than half of the nation's businesses are holding their parties.

"The holiday party remains an important tradition at America's businesses," Dale Winston, the firm's CEO, said in a statement. More than a chance to unwind with your co-workers, office parties are also an important bellwether of the nation's economic health, he added.

Amid declines in the housing market, looming inflation, and forecasts of lower corporate profits in the years ahead, "the strength of the stock market combined with stable interest rates and a drop in energy costs in recent months has given employers the confidence to celebrate," he said.

And the confidence to foot the bill. A full 91 percent of employers surveyed said they will be paying for the party, even as 28 percent said they expected costs to be higher than last year.

Most of those parties will take place at night, somewhere outside the workplace, and with a full-stocked bar, the survey found.

What they won't include are clients, spouses or gifts.

Almost every business surveyed said they were not inviting clients this year — a growing trend signaling the end to an old-school practice of using company parties to network  with prospective customers, the survey said.

Likewise, less than 40 percent said they would be exchanging gifts this year, a 10 percent decline from the economic boom years of the late 1990s, the survey said.       

Yet, in lieu of gifts, businesses are instead jacking up their party budgets, according to Challenger, Gray & Christmas, a New York-based outplacement firm.

One in three companies surveyed said they are increasing the budget for this year's holiday party by an average 16 percent, the firm's annual year-end survey of human resource executives found.

The results of the survey were confirmed by interviews with event planners, venue operators, caterers, and party planners, the firm said.  

"Companies are definitely in a party mood," John Challenger, the firm's CEO, said in a statement. "It would not be surprising to see the return of some late-1990s, dot-com-era style parties."

Given today's tight labor market, office parties are an important opportunity for employers to show how much they appreciate their employees, Challenger said. "Parties could grow even more elaborate as companies recognize their effectiveness in recruiting and retention," he said.

That said, office parties are also filled with pitfalls for employees, especially with employers spending more each year on alcohol, Challenger added.

Topping the list of potential hazards are drinking too and fooling around with a colleague, according to WorldWIT, an online networking group for women professionals.

A recent survey of its 50,000 members found the biggest office party regrets also included forgetting a co-worker's name, brown-nosing with upper management, and getting caught gossiping.

Copyright © 2012 Mansueto Ventures LLC.


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