This Christmas, the offices of RLM Public Relations won't deck its halls with boughs of holly. In stark contrast to last December, when employees opened gifts during a catered Christmas lunch, the New York firm has canceled its annual party. In this tough economy, CEO Richard Laermer feels more companies should follow suit.
"I think a lot of people are trying to keep the Christmas spirit alive, and I appreciate that, but this is not a downturn. It's a financial crisis," says Mr. Laermer, who recently had to cut his staff from 19 people to 15. "They have Christmas parties and then they lay people off. So where was the money for the Christmas party?"
A good number of businesses are ditching their annual holiday bash this year. But the overall decline is relatively mild. Most companies are choosing to uphold the tradition, albeit in more modest fashion than in years past.
"It appears that while employers do want to express their gratitude by providing some sort of party, they may be mitigating the costs somewhat by limiting it to employees only," says Matt Sottong, director of an annual survey of corporate holiday traditions by the Bureau of National Affairs.
The BNA survey of 293 companies found that while holiday gifts, bonuses, and spouses are getting short shrift this year, 64 percent of companies will nonetheless sponsor a holiday get-together, a decline of just 3 percent compared with 2006 and 2007. Another survey by Challenger, Gray & Christmas, a global outplacement consultancy, concluded that 77 percent of respondents are planning functions compared with 90 percent last year. For employers, a reception is a less-expensive way of rewarding employees than giving everyone raises, says Mr. Sottong.
But shifting into a recession mode, companies are curbing lavish celebrations. Mistyka Garcia, owner of Special Occasion Events in Beverly Hills, Calif., consistently hears the same refrain from regular clients: What can she do on a budget?
"Any event planner or photographer or caterer – anyone that's used to doing these corporate holiday parties – will tell you the same thing: It's definitely been a slow season," says Ms. Garcia.
The cutbacks are also affecting hotels and restaurants. The Frederik Meijer Gardens and Sculpture Park in Grand Rapids, Mich., can usually rely on nearby GE Aviation to throw a dinner for 700 people. But this year the avionics workers will settle for an office potluck. Like so many companies that have recently laid off workers, GE Aviation is looking to strike the right tone for its get-together. It will be "very much a feeling of thankfulness on the one hand, and just a very subdued atmosphere," predicts Jennifer Villarreal, a spokesperson for the company.
Some workplaces are spreading what cheer they do have. Companies such as Red Hat Inc., Estée Lauder, and PriceWaterhouseCoopers have opted to forgo Christmas parties and donate those funds to charities such as City Harvest. This holiday's corporate philanthropic endeavors may not match those of four years ago, but they're nonetheless up on last year, according to the BNA survey.
For its part, the Liberty Science Center marshaled its 145 employees for a toy-and-food drive. The employees will also bring potluck desserts to supplement pizzas that the museum's managers are paying for in lieu of the nonprofit's usual catered affairs with live music.
"Everybody has friends and family who are unemployed. It's not the time for a big celebration," says Elizabeth Romanaux, vice president of communications at the science museum in Jersey City, N.J. "But we want to get together and commemorate the year and pat each other on the back."