Environment and Small Business

'Tis the season for small businesses to party on: Close-knit companies more likely to hold holiday celebrations, but more firms of all sizes are getting into the spirit

November 27, 2006

While many large companies have decided to scale back holiday parties or give them up entirely in recent years, small businesses continue to spend merrily on the annual gatherings.

"They're doing well, making lots of money and want to celebrate with their employees," said Kathy Ray, director of catering at the Indianapolis Marriott Downtown.

Employees of small businesses are like families, so it makes sense that those companies would be less likely to eliminate or cut back on holiday get-togethers, said Jason Shelley, state director of the National Federation of Independent Business.

The advocacy group has 14,000 members in Indiana, and more than half employ five people or fewer. When you're that small, the boss can't cut the holiday party by e-mail and avoid the consequences.

"It's just something employer and employee look forward to every year," Shelley said.

That's increasingly true of all businesses, despite the recent cutbacks.

About 94 percent of companies nationwide will host some sort of holiday party this year, up 7 percent over last year, according to a survey by New York-based recruiting firm Battalia Winston International. More than 74 percent of gatherings will be held at night, 77 percent will be off-site and 52 percent will be for employees only, the survey found.

The firm, which first conducted the annual survey in 1988, does not separate data for large and small businesses.

For most companies, the crazy parties of the late 1990s are a thing of the past, as executives take a conservative approach and try to give company-wide gatherings a lower profile, said Jo Bennett, a partner in Battalia Winston.

"They're not doing great big, grand-scale parties," Bennett said. "They're doing something to get together, but they don't feel obligated to really go over the top."

Gone are the parties where intoxicated co-workers don lampshades or reindeer antlers.

"I think people are concerned about proper decorum and ethics and how they handle alcohol," Ray said. "People are afraid. It's just not as much fun anymore."

In Indianapolis, some businesses are eliminating company-wide parties, opting instead to allow departments to plan smaller events or donate party funds to charity, she said.

And not all big companies are cutting back. For example, Simon Property Group is planning two big events for Dec. 15, beginning with a luncheon at the Indiana Roof Ballroom.

More than 900 are expected for the lunch, which will feature prize giveaways, a buffet and comments from top executives, said Michael Florence, cochairman of the holiday party committee and a former president of the Simon Employee Association. After the lunch, more than 400 are expected to attend an after-party at the Conrad featuring a D.J., karaoke and game room.

Meanwhile, party reservations for smaller firms and recently formed businesses are on the upswing, Ray said.

Small businesses have added expensive flourishes such as fine wine and specialty linens to their events this year, said Joe Husar, co-owner of Kahn's Katering and meeting hall Montage at Allison Pointe.

"Overall, the events today are nicer than they were a year or two ago," said Husar, who will cater between 250 and 400 parties this holiday season.

He said small businesses use the parties "as a thank you, not just a holiday event." One of the challenges, he said, is to find quality space for a small group, but smaller businesses also are more flexible.

Since Husar's employees are so busy hosting other parties during the holidays, they traditionally celebrate in the summer for a grill-out party, complete with swimming and a band.

Employees at Indianapolis-based Performance Mechanical Contracting will get together Dec. 16 for their third-annual party at a downtown hotel for dinner, holiday bonuses and revelry.

The design-build mechanical contracting firm, which employs 30, reserved a block of hotel rooms so no one is tempted to drink and drive.

The gathering is about "camaraderie, chemistry, culture," said Michael Hufnagel, the company's president.

"It's important to get the people out in a non-business environment and let them hang out," Hufnagel said. "We're trying to create some tradition."

The bottom line, according to Bennett of Battalia Winston: Expect lower productivity the week of Dec. 11, when most companies will hold their parties.
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