Business owners slash spending on Christmas party: SmartCompany poll

Australian businesses are cutting back sharply on spending on Christmas parties and gifts in a bid to reduce costs, according a special SmartCompany poll of 122 entrepreneurs.

Australian businesses are cutting back sharply on spending on Christmas parties and gifts in a bid to reduce costs, according a special SmartCompany poll of 122 entrepreneurs.

More than 33% have abandoned plans for an office Christmas party altogether, while just under half of those who are going ahead with the staff Christmas party will slash the amount they spend by between 11% to 50%.

Just over 25% of businesses will spend $50 to $74 a head on the staff Christmas party, although 21.7% of entrepreneurs say they will lash out and spend $100 to $200 a head on their lucky staff.

Customers look set to miss out completely this year, with 92% of respondents revealing they will not hold a Christmas function for clients this year. Of the small number of businesses still planning to hold a staff Christmas party, 80% will slash costs, with most cutting by 10% to 30%.

But while employers can get away with canning the customer Christmas party, experts have warned against putting staff offside by cutting back too hard on the staff function.

Tim Sharp, organisational psychologist and adjunct professor at the University of Technology, Sydney, and RMIT, says the cost of killing the Christmas party needs to measured against the cost to staff morale.

“For many people, cancelling the Christmas party will be quite demoralising, dissatisfying and insulting,” he says. “A lot of people would be pretty peeved.”

That said, Sharp says workers will understand if their employer cuts down on Christmas party costs in difficult times. Moving from the five-star hotel to a company sausage sizzle sounds like a bit of comedown, but Sharp says employees will be OK as long as the boss explains the decision.

“If organisations can communicate that effectively, and the employee can still see that the employer is making an effort, then it will be fine,” he says. “At the end of the day people want to mingle and have a bit of fun.”

(For more do’s and don’ts of Christmas cutbacks, see our top story, Cutting Back Christmas.)

Another downturn austerity measure being used by companies is around enforced staff leave, with 60% of respondents saying they will force employees to take a break at Christmas; 21% of these bosses will ask staff to take a longer-than-usual break to save money.

But despite the downturn, around 50% of companies say they will still give staff gifts this Christmas, although 42% of gift-givers admit they will be trimming their spending on presents.

Still, it seems Australian bosses are a generous lot, with 27% saying they will spend $50 to $74 on a gift and 22% saying they will spend over $100.

After a tough year, at least Australia’s entrepreneurs are getting a break: 72% of business owners will take a break at Christmas, with 65% off for one-to-two weeks.

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