November 30, 2003
EXECUTIVE LIFE
The Holiday Party as a Leading Indicator
By ABBY ELLIN
EW events seem to cause more collective anxiety in the office than the company holiday party. While some employees live for the chance to let their hair down and do the "electric slide" with their pals from accounts payable, others see the party as a dreaded requirement that is about as pleasant as root canal.
But perhaps no one has a more difficult time with the annual office party than the executives who want to hit just the right note - and the right spending level - with the festivities they provide for their employees.
In 2001 and 2002, many executives were reluctant to pay for a major party. But this year, with the stock market up and several economic indicators hinting of better times ahead, spending on holiday parties appears to be rebounding.
"We feel that it's the one time of year when we can really give back to our employees," said Maribeth Roman Schmidt, the president of FCF Schmidt Public Relations in Plymouth Meeting, Pa.
A recent national survey of 100 hotels, caterers, special-events companies and other businesses by Challenger, Gray & Christmas, the outplacement firm in Chicago, found that most companies would be spending more money on holiday parties this year than they did in either of the last two years.
"Companies are planning to make every effort to have a holiday party to remember," said John A. Challenger, the chief executive of the firm. "In that way, they will demonstrate how they value their employees' efforts in what has been a pressure-filled year."
For the 26 employees of Ms. Roman Schmidt's company and its sister firm, Ferrare & Fleming Advertising, that means a limousine ride to the Saturday Club, a party space in a Main Line suburb of Philadelphia. There, they will be greeted by a buffet dinner, disc jockey, dancing and karaoke.
Jessica Seamans, an assistant account executive and one of the planners of this year's party, said she wished she had begun the preparations earlier. "We found, even three months out, that many venues and caterers were already full," she said.
That seems to be the case in many cities - another sign that the office holiday party is coming back to life. Bookings at Allen's Catering of Chicago, which said it had 11 holiday party cancellations in the week after Sept. 11, 2001, are up 20 percent over last year. The owner of Allen's, Ingvar Wikstrom, said companies were spending 18 percent to 22 percent more than they did in the past.
Nancy Sharp, the vice president of Food for Thought, a caterer in Chicago, said: "Business is marvelous. In September we got a flood of inquiries, and everything started confirming in October, so it's showing us that the economy is saying, 'It's O.K. to spend now.' "
That said, buffets - not sit-down dinners - are in style. And popular items are turkey, polenta, and "more pork than tenderloin because tenderloin is so expensive," she said.
"Corporations aren't trying to go over the top and wow their customers," she added. "They're not trying to impress them; they're thanking employees for weathering the storm of the economy and keeping costs in line."
That is what is happening at HomeBanc Mortgage, based in Atlanta. HomeBanc holds two types of parties: one for employees and one for its business partners - realtors, vendors, home builders, lawyers - in areas throughout Florida, Georgia and the Carolinas. Last year, said Patrick Flood, the company's chairman and chief executive, HomeBanc held only four parties for business partners; this year, there will be nine, with about 7,000 guests.
THE last couple of years have had most C.E.O.'s reducing spending, but our industry has done well," he said, adding that the parties, which begin this Tuesday and end on Dec. 15, will cost the company about $500,000, compared with roughly $350,000 last year. But they're a worthwhile investment, he said: "We view these as very important client and employee appreciation events that are key to our business."
Of course, not everyone is ready to go all out, and many firms are holding more intimate gatherings.
As part of an agreement after 120 workers lost their jobs last year, CUNA Mutual Group, a worldwide insurer of credit unions, decided to forgo the usual party and holiday bonus. The company, which is based in Madison, Wis., is not having a holiday party this year, either. Instead, on Dec. 18, at around 9:30 a.m., the 2,500 employees in Madison will gather in the office building's atrium.
There will be no food or drink, but the CUNA Mutual Group choir will lead everyone in song. "We're going to read a few letters from customers and we'll reflect on everything we've accomplished in '03," said Sydney Linder, a company spokeswoman. "I think it will be great and festive." The celebration will also be on the company's Intranet, so colleagues in other cities can watch.
At some companies, the holiday party is fueled more by creativity than money. Two months ago, Tom Hirons, the president and chief executive of Hirons & Company, a marketing agency in Indianapolis and Bloomington, Ind., looked at his company's finances and wondered what he could do this year for his 75 employees. "We've grown by a few percentage points" over the last year, he said, "but we haven't had the profitability we expected."
Then Deanna Haworth, the company's public relations specialist, suggested that it trade its marketing services for food. Mr. Hirons said, "We're doing an ad campaign for the restaurant's services."
As for entertainment expenses, "we're our own entertainment," he said. Instead of hiring a D.J. to spin tunes, the company hopes that the guests will be amused by the "freshman class video," a 20-year-old tradition in which new hires spoof their colleagues. Spouses are welcome at the party, but they have responsibilities, too: they are required to stand up and sing in the spouse choir, "so they feel a part of the Hirons family," Mr. Hirons said.
Before the party, each employee designs an ornament that reflects his or her past year. "People use it to announce marriages or pregnancies," said Mr. Hirons, who estimates that the festivities will cost a total of about $10,000.
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