Could office Christmas parties be on the chopping block?

A host of redundancies and cost-cutting measures in recent months is raising the question of whether end-of-year parties are a bad look in today’s economic and labour market conditions, or if they’re a tradition that shouldn’t be touched.

Back in 2022, Robert Half found that one in three businesses had cancelled Christmas parties due to rising inflation, as reported in HR Leader’s sister brand, Accountants Daily.

While, in theory, cancelling parties would free up money that could be spent on retaining employees, employers have more than money to worry about when it comes to cancelling Christmas parties, with reputation and employee attitude also on the line.

According to Probiotec Limited chief people officer Annalinde Nickisch, Christmas parties aren’t inherently in poor taste just because redundancies were made, but context matters.

She explained that an extravagant event weeks after major workforce changes may be seen as tone-deaf, but it is more about the scale and timing of events rather than a blanket rule.

Nickisch also said: “Redundancies and financial distress aren’t the same thing. Job cuts are often driven by restructuring, automation or efficiency, and are proactive decisions to protect long-term profitability rather than a sign a business is struggling.”

Angela Sharpe, head of people and culture at employment law firm Swaab, said employers should ensure Christmas parties are executed with sensitivity around internal and external factors impacting employees, but that any cancellations risk appearing as a “‘Grinch’ move, souring employee morale and taking away something that many employees look forward to”.

Sharpe said: “Consideration should be given to what it is we are really saving if we were to forgo this celebration. Are the short-term savings worth what we would lose down the track?”

Echoing this sentiment, Nickisch said that for organisations under genuine cash flow pressures, reviewing discretionary spending, including a Christmas party, is appropriate, but it is important to distinguish between responsible cost management and symbolic cost-cutting.

“For most organisations, a Christmas party is a modest, one-off expense. Cancelling it rarely moves the financial needle, but it sends a very clear message to the people who stayed. Those employees have often absorbed uncertainty, disruption and heavier workloads. The saving from cancelling is small and visible; the cost to morale is larger and much harder to measure,” she said.

Nickisch reinforced that it is up to HR to make the people impact clear before the executive team makes the call, and in cases, to push back where cancelling is about optics rather than commercial necessity.

For companies that have to make the difficult decision, Sharpe said “it should be communicated with as much detail as possible as to the reason senior leaders have made the decision and the outcome it intends to achieve through the cancellation of the event”.

Further, Sharpe explained that Christmas parties are more than just the event itself, given their cultural significance and professional acknowledgement of employee contribution.

“It provides an opportunity for colleagues to get together and enjoy each other’s company away from the day-to-day pressures of work. Celebrations like these contribute positively to the culture of the business, enhancing morale and creating fond memories of times spent together,” she said.

Further, the extravagant celebrations of the past are not the only way to celebrate staff, with Sharpe suggesting employers concerned about the impact on the organisation’s wallet to consider other options, such as having the celebration onsite with catering brought in, removing plus-one invites and offering drink vouchers as opposed to an open bar.

“Swap the traditional wine and dine experience with a fun activity such as an ‘Amazing Race’ type of event or a ‘paint and sip’, which can be pulled together inhouse. Incorporate a theme or better yet, capitalise on the talents of your team and perform some karaoke together,” she said.

“Celebrations do not need to be over the top and expensive. A good time can be had through some creative brainstorming and rolling up your sleeves.”

In the same way, Nickisch offered a team lunch or barbecue that provides the same degree of meaning while keeping celebrations modest.

At the same time, she urged organisations to consider the timing of redundancies.

“Unless a business is facing genuine solvency concerns, making people redundant in the weeks before Christmas is a bit of a dog act … if a restructure isn’t driven by immediate financial necessity, it can wait until January,” she said.

Further, she noted that cancelling a staff Christmas party while management enjoys bonuses and perks would fuel an “us and them” mentality that would erode trust.

Nickisch said: “A Christmas party isn’t a reward for the company’s financial results. It’s an acknowledgement of what employees have contributed through the year. In a tough year, that recognition matters more, not less, because people have often delivered through difficult conditions whether or not the business hit its targets.”

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