Holiday parties getting downsized
A survey of human resources managers shows that fewer companies are planning holiday parties this year due to cost cutting.
NEW YORK (CNNMoney.com) -- The office holiday party will be a modest affair this year, if it happens at all, according to a survey of human resources executives released Tuesday.
Challenger, Gray & Christmas, an outplacement consultancy, said its annual survey on holiday parties found that 62% of companies are planning holiday festivities this year. That's down from 77% a year ago, and 90% in 2007.
A full 10% of the companies surveyed are canceling parties altogether due to cost-cutting.
The survey, based on responses from about 100 human resource executives nationwide, also showed that companies are planning "low profile, low budget" holiday parties.
About two-thirds of companies are spending the same amount of money for this year's party as last year, while a third are spending less than they did a year ago.
"For companies that have recently announced layoffs or other significant cost-cutting measures, such as wage freezes, it would be difficult to justify, let alone get in the mood for, a holiday party," John Challenger, chief executive of Challenger, Gray & Christmas, said in a statement.
For those companies that are holding parties this holiday season, the majority will be employee-only events and will likely be on a workday or near the end of office hours, according to the survey.
Only 36% of companies are using a caterer, event planner or other outside service. That suggests more employers are organizing "smaller, departmental potluck events," according to the outplacement firm.
Despite this year's focus on cost cutting, a majority of companies still plan to hold their functions at an offsite venue, and more than half are planning to serve alcohol.
Challenger warned that employers could encounter "significant risk" hosting such events, including the possibility of sexual harassment claims, especially when they include alcohol.
"For employees, now is not the time to draw attention to oneself with embarrassing conduct at the holiday party, particularly at a time when everyone's job is at risk of being downsized," Challenger said.
In addition to financial challenges, this year's holiday party could also be nixed by swine flu, according to the outplacement firm.
"It is too early to tell if and how H1N1 is going to impact the nation's workplaces, but early examples of how quickly the virus spread through universities and elementary schools is not promising," Challenger warned.
However, the office holiday party is also a good opportunity for employees to network with fellow workers and form alliances that could be useful in the future.
"Make an effort to break away from your comfort zone and introduce yourself to those who might help your career," advised Challenger. 
