Associated Press
Workers at Optika Inc. and their spouses look forward to toasting the holidays each December when the company pays for a banquet in a hotel ballroom, complete with a live band, prime rib, fine drink and good cheer.
This year, though, there’s not much to cheer about. The party’s off.
"We have a corporate goal for profitability this quarter, and we want to make sure we hit that goal," said Mark Ruport, president and chief executive of the struggling software company, who recently told 140 workers the event was canceled.
Optika, based in Colorado Springs, Colo., joins a growing list of employers scaling back or simply canceling holiday celebrations, largely reflecting efforts to cut costs in the face of recession.
For Ruport, it’s not simply a dollars-and-cents issue, but a demonstration of the company’s commitment to a leaner mindset in a new economy offering little to be cheerful about.
"The attitude is the determining factor. We’re asking people to look at all parts of the company, whether they be generating revenue or trimming expenses," he said.
But while the quest for profits is behind many of the changes, some executives say they’re ratcheting back at least partly because it just doesn’t feel right to throw a party after the Sept. 11 terrorist attacks.
About a quarter of 150 companies surveyed recently by executive search firm Battalia Winston International said the attacks caused them to rethink plans for employee celebrations, with most of those deciding in favor of smaller, less expensive parties.
About 41 percent of the companies surveyed say they plan to spend less on their parties than in 2000, compared with just 3 percent who gave the same answer last year.
Another survey by business publisher BNA Inc. found that the vast majority of companies still plan to host some type of party for their workers. Most companies see employee parties as a given, and few rethink spending on such celebrations whether times are good or bad.
BNA’s survey found 76 percent of companies planning at least one employee party, virtually the same as the 77 percent last year. The firms polled plan to spend an average of $30 per worker, down from $35 last year.
But while the numbers show only incremental change, a number of executives indicated they are rethinking such plans because of budget constraints.
"A year ago, nobody talked about canceling or scaling back," said Mike Reidy, director of surveys for BNA, which queried 448 companies. "There was a fair amount of anecdotal information this year along those lines."
The new mindset is evident at many businesses.
In Chicago, the owners of Pear Tree Catering have seen a 30 percent drop-off in requests for corporate parties and a number of companies choosing to host lower-cost buffet luncheons on premises rather than offsite dinner banquets.
"There’s really a downplay on big events that are fully staffed and in high-priced venues," said Jessie Swain, the company’s vice president of sales and marketing. "I really think most of it has to do with the economy and budgets."
Tight finances are also dictating changes in for The Greater Miami Society for Human Resource Management, which is scaling back its annual party after corporate sponsorship fell from $16,000 last year to $4,000.
The result: a DJ instead of a live band, no free wine with dinner and fewer hors d’oeuvres.
At Optika, a publicly traded company that has not earned a profit since 1999 and which spent about $10,000 for its holiday party last year, about $8,000 of that will now be applied to the bottom line, Ruport said.
The company will use the remainder to buy gifts for homebound elderly residents of Colorado Springs, dispatching teams of employees to deliver them in mid-December. Ruport says the camaraderie that will build could make the delivery a new company tradition.
"It builds the culture and teamwork of the company so it’s not purely altruistic," he said, "even though we’d like to think so."
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