Businesses should be wary of cutting back on Christmas festivities as they can risk damaging morale

For small businesses, cutting back on Christmas festivities can seem like an obvious quick win in the ongoing effort to control costs.

Christmas Office Parties

Small business body the Forum of Private Businesses (FPB) has warned such moves can backfire in the long-term. The advice comes on the back of a study that found that almost half of SMEs (48 per cent) are not planning a Christmas party this year, yet 63 per cent recognise that cutting back or cancelling Christmas parties damages staff morale and therefore productivity.

The report, commissioned by communications agency Pitney Bowes, found that of the businesses that still plan to throw a party, 91 per cent will spend the same or less than last year. Forty one per cent of all those surveyed blamed a decline in Christmas related activities on tough times.

FPB senior policy adviser Phil McCabe says it is important for business owners to show staff appreciation, and that there can be alternatives to expensive parties.

"Controlling costs is always important, but staff Christmas parties are a valuable way of showing recognition and appreciation of your employees," he explains. "In turn, good employee engagement delivers bottom line results. Choosing not to recognise staff at Christmas could have a negative effect on morale and therefore productivity so companies need to introduce other ways of motivating. It doesn't have to be costly."

Phil Hutchinson, tactical marketing director at Pitney Bowes, adds: "In place of parties, companies can try other ways of showing their appreciation, such as more flexible working, relaxed dress codes, or setting time aside for activities such as a festive quiz."

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