Holiday spirit doesn't extend to parties and bonuses
The holiday party punch will be flat this year and so will a lot of paychecks as the line or cut back on year-end bonuses and holiday parties.
About 85 percent of companies will host a holiday party in 2007, according to a survey by Battalia Winston, an international search firm based in New York. That's down from 94 percent in 2006 and the lowest percentage since the Sept. 11 attacks.
As for year-end bonuses, 35 percent of employers have a December holiday or gift program, a survey to be released this month by benefits consulting firm Hewitt Associates shows. Ten percent of companies that had such a perk have ended it.
ZipRealty, based in Emeryville, Calif., is forgoing its annual party at the Ritz-Carlton in favor of an in-house potluck gathering. The reason: Cutting expenses is critical in the current economic climate. The firm recently went through layoffs. "We didn't think it was appropriate. We could keep a person or have a party," says CEO Patrick Lashinsky.
YogaFit Training Systems Worldwide of Torrance, Calif., is giving higher bonuses but spending less on its party. Instead of meals at local restaurants, the company founder is hosting a party at her home.
The drop in year-end parties comes amid major losses in financial services and other sectors, says Dale Winston, CEO of Battalia Winston. It's hard to justify the expense of a party amid such a cost-conscious climate, which is why those employers having parties are in general spending less. "A lot of companies are switching to luncheons," Winston says. "There are two reasons: You don't have the spouses or the drinking issues. And a lot of people commute and want to go home at night."
The decline in year-end bonuses is based in large part on employer efforts to tie pay to performance, avoiding the concept of a holiday bonus entitlement. Instead, companies are giving incentive pay to team or individual performance and basing it on the contributions they make to the firm, says Ken Abosch, a consulting business leader for Hewitt.
For those companies that do give a holiday bonus, the median amount is $250. The most frequently cited reason for discontinuing December bonuses or gifts was cost.
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