This article first appeared in the St. Louis Beacon, Nov. 25, 2009 - Last year, Schupp Co. had a record-setting year. But the St. Louis-based advertising and marketing firm knew the economy wasn't in the best state, so it decided to cut costs, says Mark Schupp, president. The company, which employs about 34 people, stopped building additional office space, postponed infrastructure improvements and put a freeze on raises. They also considered cutting the holiday office party.
Cost was a factor, of course. Plus, Schupp says, the company was concerned that having their annual party would send the wrong signal during difficult times.
Then, the second half of the year turned around, and Schupp decided another message mattered even more.
"It also sends a good signal that you're doing well," he says.
And so the party's back on. It will be at their downtown office, with a photo booth and psychics, catered food and beverages, even a wine guy. Schupp Co.'s also taking all their employees out for a holiday lunch at Charlie Gitto's. Plus, they still get bonuses.
"It's good for morale," Schupp says, "and just to send a signal that we are healthy even in this difficult economy."
Regardless of the message it sends, or maybe because of it, some businesses do seem to be scaling back on holiday events.
In an annual survey of 108 companies, New York-based executive search firm Battalia Winston Amrop found that 81 percent of companies surveyed will have a holiday party. That's the lowest number in the survey's 21 years, and half of responders either canceled the whole thing completely or made the party more modest, according to a recent Washington Post story.
In St. Louis, December is usually crazy for Steven Becker, owner of Steven Becker Fine Dining. Compared with last year, business was up from September through November for the company, which caters outside events and at the Coronado Ballroom. But December's way down.
Not every year has been like this, though. Becker has catered events with ice carvings and sashimi chefs. "You name it," he says.
This year, office parties are more informal and often in the office. But Becker doesn't think that's because of the economy, but because of perceptions.
"The word party's a dirty word," he says. "It literally is."
He blames A.I.G., which sent execs on an extravagant retreat shortly after taking federal bailout money last year. Businesses have money this year, Becker thinks. They just don't want to get called out about a fancy fete. That strategy is not good for his business or the service industry, where waitstaff depend on events for work. And he doesn't think it benefits the employees of those companies who are cutting back, either.
"It's a little demeaning in certain ways," Becker says.
But that may depend on the business.
OFFICE SPACE
For nearly 35 years, the employees of Schneider Real Estate in St. Charles have enjoyed a holiday office party. Some years it's been at a restaurant, but mostly in the office, starting around 4 p.m.
"Everybody brings something and the company provides a ham and drinks and libations," says Merle Schneider, co-owner.
The firm doesn't have their potluck parties to save money, though. It's just more informal than a restaurant, he says. There's a variety of food, games and even a visit from Santa for the 70 or so people who come.
That was true last year, when business for the 40-agent firm was at a low-point, and it's true this year, when Schneider feels the real estate market is 10 times better and confidence in the market is on the rise.
"Last year was the tough year," he says. But even then, there was no question about having a party. When people do get a little doubtful, you don't want to start cutting back on stuff like that."
That may be true at Schneider, but keeping up with the party when cutting other things could backfire, too.
"I suspect the effect is complex and depends on what's happened in the past," says Kurt Dirks, professor of organizational behavior at Washington University's Olin School of Business.
For instance, if you're used to an office potluck, like at Schneider, then that's what you expect. And even if you're used to something more upscale, Dirks says, when coworkers are being let go and budget cuts made, employees may question why money's being wasted on a party.
In fact, they may want to give back.
At Edward Jones, media specialist Jackie Knolhoff says there isn't one big company party.
"We've never done anything like that," she says.
Instead, they leave it up to different departments to do their own thing, and some choose to spend a half day volunteering.
Other big companies, Anheuser-Busch and Emerson, did not return phone calls for this story, and MasterCard declined to comment.
Last year, Standing Partnership, a communications firm that employs 23 people, cut the party in favor of a potluck.
"It just didn't feel right doing a big celebration," says Maya Lunnemann, an associate. But they still wanted to celebrate the holidays and spend time together, so the firm had a potluck and donated the money they would have spent on the party to organizations in the community. This year, they're having a casual lunch downtown and taking a trip to the Arch to support downtown businesses.
At Quilogy, which offers IT professional services from its St. Charles headquarters, even last year there was no question of cutting the party.
"It's become a tradition that people look forward to," says Mike Butts, senior marketing manager. Employees and their morale are very important to the company, Butts says. In fact, they have catered events once a month.
Quilogy's office party for the 100 or so St. Louis area employees and their spouses happens at the office as well, but like Schupp's, it's catered in and offers drinks.
"Personally, I think it makes sense to invest in your employees," Butts says.
And while some companies may worry about the bottom line, he thinks cutting back on one annual party is just a short-term fix that could lead to less productive, less satisfied employees.
Schupp suspects the office party means more to the managers than the employees, but, he says, once employees get used to them, they expect them anyway.
TABLE FOR 40, PLEASE
Not everyone's having a potluck and office Santa this year.
At the Chase Park Plaza, bookings are down compared to last year, says Stacey Howlett, director of sales and marketing.
"We do have holiday parties on the books," she says. "I can tell you that people are definitely more aware of what they are spending and how they are spending it."
So instead of fancy linens and chairs, they're choosing the basics but still getting the party. The benefit for people still interested in doing the hotel party, she says, is it's basically a buyer's market. Hotels are competing with each other for less business, and they're willing to make some deals.
"This is the year to negotiate."
Other hotels -- the Millennium, the Westin and the Omni -- did not return phone calls for this story.
Of all the office party fallout, Becker suspects that restaurants will do pretty well this year. And that's certainly true for Kemoll's, on the 40th floor of Metropolitan Square, and its banquet facility, Top of the Met, on the 42nd floor.
"Last year was average," says Doug Cusumano, general manager. "This year is way above average."
Cusumano doesn't see any specific trends, there's a mix of businesses, he says, and sizes. But for eight evenings during December, the entire restaurant, with five separate dining rooms, is sold out. Also, the Top of the Met is booked every Friday and Saturday through December. Cusumano figures 85 percent of that is business-related.
And if he has to speculate, all those bookings tell Cusumano something about the economy.
"It seems as though, if we are or were in a recession, then we're coming out of it."
Regardless of all the business, though, employees at Kemoll's will not get a holiday party of their own, despite the fact that they make them happen for so many. Actually, Cusumano says, they never get an office party of their own, and, unlike most businesses, that's not because of a bad economy.
"We are so busy," he says, "that we can't really pull it off."