The Decline of the Office Holiday Party

The economy is recovering, companies are spending more on benefits, employee satisfaction and retention are being monitored. And the holiday party is declining.

Could it be that people don't like it?

Of companies surveyed by the Society for Human Resource Management (SHRM), 65 percent said they plan to hold an end-of-the-year gathering for their employees, down from 72 percent in 2012. In 1998, 83 percent of those surveyed threw parties. This year's participation rate is not a


s low as recession levels: In 2009, only 61 percent of employers were planning soirees.

But, unlike in 2009, companies aren't opting out for financial reasons. This year, only 6 percent of respondents cited budget constraints as a reason for cutting the party, down from 20 percent in 2009, at the height of financial crisis austerity.

"Maybe they realized that nobody seems to be missing these," said Evren Esen, director of survey programs at the SHRM. Maybe companies that originally zeroed out the festivities as a cost-cutting measure sensed that few were moping around because they wouldn't get a chance to drink with their co-workers and bosses. 

Employees have too much going on this time of year, said Cathy Coughlin, director of HR at Old Line Bank, of Bowie, Md., which has given up after about a decade of partying. It’s hard to find a central location for such a big gathering after work, Coughlin said, and "we didn't want to do something on the weekend that people felt obligated to attend and it would be an additional burden for employees during an already busy season."

It would be bad enough if the holiday party were just a tolerable duty. But it can be aggressively annoying and occasionally disastrous. 

"I hope the actual explanation is 'because they're the worst,' " one colleague told me when I mentioned the survey results. Fast Company rounded up a healthy list of embarrassing stories. Inc. had to offer advice for creating "Office Holiday Parties Your Employees Want to Attend." The combination of co-workers and alcohol often encourages unfortunate antics and can result in wounded feelings, tattered reputations, and even HR action in the new year. 

With wages stagnant, one 2010 survey found, many employees said they would rather receive money or gifts than stand around in awkward circles drinking — although only 23 percent of the companies surveyed by the SHRM said they would offer non-performance-based yearend gifts.

Best-case scenario, nobody drinks too much and everybody is pleasant to the people they already spend too much time with. Which they could do any day at the office with the people they spend too much time with. Those who do like socializing with co-workers don't need an occasion. More companies are offering alcohol in the office — kegerators are now a fixture of the startup office cliché.

When the economy contracted, many once-lavish parties retreated to office break rooms. In 2012, with memories of the recession still raw, Wall Street took its parties underground. In a better economy, you'd think companies would want to flaunt their increased profits with blowouts.

Maybe it's the optics. Cash-rich Silicon Valley companies last year tried (and failed) to keep their parties understated, Bloomberg Businessweek reported, fearing criticism for profligate spending.

As the SHRM's data show, most employers are still throwing the holiday party. As for the decline, it's possible that more companies are simply shifting away from big bashes, leaving end-of-the-year celebrations to individual departments. 

Or maybe they just aren't seeing the ROI.

"Companies are always looking for how they can better maximize their benefits," said the SHRM's Esen. "They look at them strategically. What do employees value? Maybe they can use that money to do something else that would be more beneficial."

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