According to the Forum of Private Business more than half of small businesses are expected to do away with the annual festive party for staff.
The Forum has warned bosses that to risk alienating their workers - who have more than likely worked hard during a particularly tough year - eroding morale further, and disincentivising staff to go the 'extra mile' for their company in future.
The Forum said while cash may be in short supply for many SMEs, festive events don't have to cost the earth.
The Forum's chief executive, Phil Orford, said: "The benefits of an annual get-together cannot be underestimated. They encourage communication, motivate staff, and reward them at a time when other perks, such as pay rises and bonuses for many just aren't an option."
The Forum has advised employers:
- If you have to cut the Christmas party budget, explain this to staff, most of them will understand that times are tough. Also ask them for alternative ideas that do not cost much money.
- You do not have to have an expensive Christmas party with a three course meal and a free bar. Nor do you have to rent out a venue, if you have the space to do it in your own premises and it is an appropriate venue. An informal get together with a few nibbles, with staff invited to bring a bottle, is better than nothing.
- For free entertainment gets everyone talking, you could hold a quiz and donate a present as the prize for the winner. Be creative with the budget you have but just make sure you have fun!
- Rather than the Christmas party and an evening meal, you could take staff out for lunch at a local pub or restaurant. It will be cheaper than a traditional party, but your staff will still feel they've been out.
- If you want to take your staff out for a meal or drinks, be sure to look for the best price. You can use group deal websites to source big discounts for staff nights out.
- Showing staff you recognise their hard work can mean more than any gift or monetary bonus. Take the time to go round your place of work and talk to every member of staff. Talk to them about their plans for the holidays and thank them personally for their hard work. 'Thank-yous' still go a long, long way as it shows hard work has not gone unnoticed.
- Make people feel valued by giving awards for exceptional work in your organisation, for example, the person who's made the most sales or the most punctual time keeper.
- Allow staff to arrange a 'secret Santa', where participants each buy a present for one other member of staff. This won't cost you anything.
- If it won't affect productivity too much, you could allow staff to go home a couple of hours early on the last day before the Christmas holidays, especially if this time would usually have been taken up by the Christmas party. Whether its young workers eager to get to the pub, or those with children eager to get home - this will be widely appreciated.
- Allow staff to get into the festive spirit by decorating the office with Christmas decorations. Employers could even invite people to bring their own in to further save on costs.
Orford added: "The important thing for employers to remember is that being seen to do something for staff at Christmas, however small the gesture, is far better than nothing at all.
"In these tough times, small businesses need to retain their best staff. Motivated workers are a valued commodity and help businesses perform better."