By Claire West

Almost 40 per cent of SMEs in the UK are planning to tighten their belts this year and scrap the office Christmas party, according to a survey of UK-based employers carried out by Employment Law Advisory Services (ELAS).

Of those, half (20 per cent of all SMEs surveyed) say it is because they can no longer afford it, a further 16 per cent said they thought it would be insensitive to hold a Christmas party following redundancies and lay-offs.

Just four per cent of UK SMEs will be spending more on their festivities this year than in 2009.

The survey, conducted by ELAS, questioned 1,974 UK bosses about the practical issues raised by the festive season, and whether they would be hit by austerity measures.

Peter Mooney, of Employment Law Advisory Services, said: “For most businesses, Christmas parties have long been the only opportunity for staff to socialise together in a non-work capacity and to bond as colleagues.

“We were interested to find out whether this was affected by the economic downturn and if so, what impact it would have. We were surprised to find that more than a third of SMEs now feel unable to hold a Christmas party because of financial difficulty or lay-offs.”

The survey revealed that staff in the North West will be hardest hit with 47 per cent of SMEs saying that they don’t plan to hold or contribute to a Christmas party, or give staff a bonus or additional time off during the festive season.

SMEs in the South East were the most generous with 72 per cent planning to have a party, and 60 per cent planning to spend the same as the previous year or more on the festive celebrations.

When asked about other reasons for cancelling the festivities, ten per cent said that their staff didn’t want to go out together, nine per cent said they were concerned about staff behaviour, and eight per cent said they were afraid of offending staff from ethnic minorities.

When asked about staff behaviour during festivities 48 per cent said they were concerned about staff drinking too much and behaving unacceptably. Just 30 per cent said they had no concerns over staff behaviour.

Peter Mooney added: “We were also interested to find out whether, from the employers point of view, the Christmas party is something that they love or loathe. Our research suggests that 70 per cent of employers have issues with staff behaviour during and after office parties, either from staff trying to bend their ear or colleagues struggling to hold their tongues.

“We may find that in the future, as more businesses find they can shave costs and eradicate staff issues by cutting out the Christmas party, that it may quickly become a thing of the past.”

Key findings

Not holding a Christmas party

39% of UK SMEs will not be holding a Christmas party
This breaks down to:
47% of SMEs in the North West
44% of SMEs in the North East/Yorkshire
45% of SMEs in the Midlands
43% of SMEs in the South West
37% of SMEs in Scotland
34% of SMEs in Wales
28% of SMEs in the South East

Of those 39% not holding a party, just 32% of those said they planned to give staff a small cash bonus or vouchers instead.

Funding festivities

40% of UK SMEs will be spending less or nothing at all on their 2010 office party

57% will be spending the same as the previous year

3% will be spending more than the previous year

Reasons for not having a Christmas party

50% of SMEs not having a Christmas party in 2010 say they can’t afford it in the current financial climate

16% say it is insensitive to staff/suppliers that have been let go

10% say staff don’t want to go out together

9% say parties just end up in fights or office flings

8% say they are worried about offending ethnic minorities

5% say they are worried about health & safety issues and red tape

2% say they can’t please everyone so they just don’t bother

Biggest concerns about staff behaviour during the festive period

30% say they have no concerns about staff behaviour during the festive period

25% say their biggest concern is general bad behaviour of staff

23% say it is staff getting too drunk

7% say it is arguments between colleagues

6% say it is colleagues getting amorous

6% say it is staff trying to suck up to the boss

3% say it is staff bullying colleagues