Office holiday parties make frugal comeback - East Valley Tribune: Business

Office holiday parties make frugal comeback

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Posted: Tuesday, December 14, 2010 3:00 pm

Office holiday parties, one of the first things to face the budget-cutting ax when the recession started, are making a comeback.

"We're not where we were three or four years ago," said Steve Palmer, senior event coordinator for Mintahoe Catering & Events in Minneapolis-St. Paul. "But we're well on our way back."

Jim McMerty, the company's president, estimated that business is up 15 percent from a year ago. That's way above the national average, where parties are up 2 percentage points, according to a Chicago company that has tracked such events for several years. In a national survey conducted at the end of November, the consulting firm Challenger, Gray & Christmas Inc. found that 64 percent of companies are holding parties this year, up from 62 percent last year. The response varies widely by region: Parties are up in Texas, where the oil business has been good, but down in Detroit, where the auto industry continues to struggle.

But even where parties are coming back, they're not the same as they were before.

Not even close. Gone -- likely for good, most industry insiders believe -- are the lavish, pull-out-all-the-stops affairs. The new office parties are low-key, modest in scope and sometimes even spur-of-the-moment.

"There used to be a time when, if you wanted a hall for your party again the next year, you had to reserve it before you left that night," Palmer said. "Now companies are waiting until the end of the year to see if they have enough money left in the budget (for a party). We've gotten six calls in the last week from people who want parties in the next 10 days."

Don Jensen, owner of Linen Effects, a Minneapolis company that specializes in event rental and décor, said many clients are delaying their parties until after the first of the year.

"A lot of corporate parties are moving into January," he said, although he isn't sure if it's because they're waiting for the start of a new fiscal year or if they delayed the decision so long that they lost their window of availability in terms of employees' schedules. "Maybe (they're) letting people go to their recitals and holiday parties. Our January events are quite strong."

Companies contemplating holiday parties are walking a narrow line. On one hand, they want the employees to feel valued. But at the same time, they don't want to appear to be wasting money, especially if the workers have faced layoffs, frozen wages or reductions in benefits.

"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," said John Challenger, CEO of Challenger, Gray & Christmas.

Companies aren't celebrating the way they used to. The Challenger survey found that 53 percent of this year's parties are being held on company premises, a huge jump from 29 percent last year. Nearly half -- 47 percent -- are being held during normal work hours, and 54 percent of them are for employees only.

Palmer confirmed that his company is doing a lot more of what they call "drop-offs," delivering a meal to a workplace for the employees. "They're trying to do more with less cash in the coffers."

The scaled-back parties also are less likely to cause resentment among employees who are still smarting over wage and benefit cuts, Challenger said. "It's not surprising that some companies found that scaled-back parties are actually preferred by employees."

Still to be seen, of course, is whether the office party resurgence is a one-year statistical blip or the start of a rebuilding trend.

"We're not back to 2008, but we're headed there," said Craig Ritacco, general manager of Mission American Kitchen & Bar in Minneapolis. "Flat is the new up. If you're even, you're good."

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