Office holiday parties go on hiatus, but the risks remain

Whether the office holiday party is a chance to unwind with colleagues or an evening of forced fun with people you're already sick of seeing all day, it's an institution of corporate America. The food is abundant, the liquor flows, and for a few hours, your colleagues are human beings. Then the next morning, you return to work with a hangover and with the same beefs you had before the party.

There's only one thing worse than having to go to the holiday party, and that's to learn that yours has been canceled. When corporate penny-pinching axes the event, that sends an unequivocal message about the company's financial strength and puts everyone on edge.

This year, even as financial markets and day-to-day company performances show signs of improvement, companies are pulling back on their holiday plans, or skipping them entirely. Only 62 percent of respondents in an annual survey by executive outplacement firm Challenger, Gray & Christmas are planning holiday parties, down from 77 percent in 2008 and 90 percent in 2007. Ten percent of companies that had been planning parties are canceling, compared with 7 percent last year.

"The strength of the recovery, or whether we are even in recovery, is still unclear," says the firm's CEO, John A. Challenger. "Companies are postponing major investments, hiring initiatives, and many other expenses, including holiday parties. 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."

Employees of a troubled company often share that sentiment: It's hard to get into the holiday spirit after layoffs, given the nagging worry that the money used for an event would have been better spent on company resources or salaries. But canceling a party reinforces the notion that a company has very little wiggle room. An alternative for many companies is to host an event at a substantially lower cost; only 64 percent of companies are maintaining last year's party budget, the survey showed. More than a quarter of companies surveyed are spending less on their parties, either by throwing a party at the end of a workday, eschewing a caterer, or closing the event to employees' loved ones.

OK, so you may not need to hire a babysitter this year, but you always need to exercise the usual caution. Don't punch your boss at the party, as a former colleague of mine once did -- especially considering the dicey job market and the rising tide of unemployment. Still, it's possible to be too cautious. "These events offer great opportunities, such as socializing with senior executives who you do not interact with on a daily basis," Challenger says. "Make an effort to break away from your comfort zone and introduce yourself to those who might help your career." At the very least, do what I do: show up at the beginning, have a drink -- then bail for the next few hours and reappear right at the end, when you can watch your boss don a lampshade for the electric slide.

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