Holiday Parties Thrive—For Now

By Vincent Alonzo

By now most of us have emerged from the tryptophan haze that comes from eating too much turkey at Thanksgiving--just in time to gear up for the corporate holiday party circuit that will start in about a week. A recently released survey of human resource executives reveals that 79 percent of companies will be planning holiday parties this year. That is virtually unchanged from a year ago when 80 percent of companies were planning parties, according to the annual holiday party survey recently released by Challenger, Grey & Christmas, Inc., a Chicago-based outplacement consultancy.

What has changed is the percentage of companies willing to spend more to celebrate the holidays. Nearly one in three companies (32 percent) plan to boost party budgets this year, up from 23 percent in 2005. The average increase in this year’s budget is 16 percent. Only six percent of firms are cutting the party budget.

It’s not surprising that companies are willing to spend this year. According to the Congressional Budget Office (CBO), before-tax corporate profits are expected to increase 30 percent this year. In the third quarter alone, the average annual profit growth among companies in the S&P 500 is expected to come in at 14 percent.

However, could this year’s holiday parties be the last hurrah? The CBO is forecasting that corporate profits will begin a trend of slower growth after this year. According to the CBO, corporate profits will fall from 13 percent of gross domestic product in 2006 to about nine percent in 2016. But perhaps that slower growth rate won’t affect holiday parties in the future. After all, these events are not just about celebrating good fortune. They are also a way for companies to show employees how much their hard work is appreciated.

So there is a chance that parties could grow even more elaborate--if organizations recognize the value of the opportunity a holiday party presents for senior executives to socialize with the rank and file employees. And you, the meeting/event planner, are just the person to champion to management the benefits of mingling and having informal interaction via fun events such as holiday parties.