For many financial services firms, planning a holiday party this year is less about raising employees' spirits and more about keeping celebration costs low.
Companies that once pulled out all the stops are scaling back or canceling traditional gatherings, especially if workers are angry because of layoffs or salary cuts.
For large firms, scrapping the holiday party may avert a public-relations nightmare. A number of big financials, including The Goldman Sachs Group Inc., Bank of America Corp. and Citigroup Inc., have nixed their parties.
“Parties are a kind of no-win, Catch-22 situation for companies,” said James Pedderson, a spokesman for Challenger Gray & Christmas Inc., a global outplacement consulting firm. “They want to boost morale, but if they've had a lot of belt-tightening with layoffs, pay cuts and furloughs, throwing a party sends the wrong message.”
Challenger Gray surveyed 100 human-resources departments at the end of October and found that 62% of companies are planning holiday parties, down from 77% a year ago.
A Watson Wyatt Worldwide Inc. survey of 201 employers in October showed that 37% plan to organize a holiday party this year, compared with 47% in 2008 and 70% in 2007.
Many of the firms that are still planning to have parties are spending less money and offering less expensive events.
For example, last week, Cheryl Holland and her staff at Abacus Planning Group Inc. of Columbia, S.C., walked down the street to a knitting shop where everyone learned to knit a scarf. Later, they grilled lobsters and ate homemade potato salad while having a beer or two.
It was a fun and lower-cost gathering for her firm, which has a staff of about 20 and manages about $500 million in assets.
More options
In terms of trimming the holiday event budget, smaller firms have more options than large companies, said Rich DeSalvo, president of DeSalvo Consulting LLC, who works with advisory and financial firms. They can choose a more reasonably priced restaurant, for example, without experiencing the logistical or scheduling headaches a large firm would face.
“For a smaller firm, you'll still see an event. But it's a fine line,” he said. “If you spend too much, employees will say, "You could have spent that amount on me and given me a raise.'”
At larger firms, employees in a particular department may pay for an event out of their own pockets, said Mindy Diamond, president of Diamond Consultants.
“Everyone's in cost-cutting mode and looking at every dollar,” she said.
There are still small things that bosses can do that employees will appreciate, said Sal Zambito, a senior vice president of business consulting for LPL Financial.
Letting employees leave early one day or bringing in sandwiches for the staff shows that they are appreciated, he said.
Staff thank-you
John LeBlanc, whose Back Bay Financial Group Inc. in Boston manages $340 million, said he wanted to have a party to thank his staff for working so hard this year, but didn't want to go overboard. He decided on a dinner for his 14 employees and their spouses.
“I don't want to send the wrong message,” he said. “I want to let people know we may have to continue to be leaner.”
He declined to disclose the cost of the party but said the firm got a great deal at a nice French restaurant at a local hotel at about half the cost of what a similar event would have cost two years ago.
Showing gratitude to staff members was also important for Robert Siegmann, chief operating officer and senior adviser with Financial Management Group Inc., which manages about $170 million in assets.
The firm is holding a dinner for staff members and their families at a Cincinnati restaurant. Afterward, they're going to see “A Christmas Carol” in 3D. The entire evening will cost about $500 to $700, he estimates.
“Everyone gets to go out and do something,” he said. “In the past, we've not done many group activities.”
E-mail Lisa Shidler at [email protected].
