With the holiday season upon us, the planning of office festivities is already well underway for many companies. But with everything from the #MeToo movement to legal cannabis to budget cuts, some business owners may be considering eliminating the holiday office party altogether. Despite the potential pitfalls, there are good reasons why it’s important to keep to tradition and celebrate the season with employees.

Why it’s important

The most important reason to throw a holiday party is that it’s a tangible expression of appreciation for your employees. Everyone likes to feel that their efforts throughout the year are noticed and rewarded. Even if your employees are well compensated, it’s still a nice gesture to acknowledge their contributions to your success. A well-planned party can go a long way toward building loyalty and retaining top performers.

If done right, a holiday party goes beyond team building to one of culture building. It’s hard to care about the work we do every day if we don’t care about the team that surrounds us. The holiday party can be a good reminder of this and add social glue that helps keep teams motivated. Keep in mind that the party is an expression of your culture; as Richard Branson said, “The way you treat your employees is the way your employees will treat your customers.”


It’s also a good idea to occasionally just let people do something fun, despite the potential for social faux-pas or legal cautions. Employee engagement includes opportunities to relax, have fun and connect with each other in social settings. This is the one time of year when everyone expects to have a party – whether they celebrate Christmas, Hanukkah, Kwanza, or another holiday. Of course, that doesn’t mean employees (or executives) should treat it as a frat house crawl. Include a friendly (not policy-driven) message in the invitation about responsible use of alcohol or cannabis to establish your concern for safety of all employees and follow best practices such as providing taxi chits to and from the event. Be the first to abide by this message; executives should, under no circumstances, get drunk or otherwise partake in bad behaviour if they still want to be respected the next day.

Party planning: How to do it right

Don’t scrimp. The holiday party is a “thank you” for employees so – within your means – don’t be cheap. One of my larger clients plays to host to an extravagant four-course dinner at prime locations each year, where everyone is dressed in their finest. Another client – a small business – plays to host to a lovely late afternoon cocktail party in the office. In each case, the employees equally appreciate and look forward to the event because the gesture is authentic and generous, commensurate with the company’s size and financial performance for the year. Also, allow people to bring a spouse. If budget doesn’t allow it, do something at the office during working hours instead.

Gauge the situation. If you haven’t had a good year or had to lay people off, a glitzy party will be poorly received as employees will question money spent on a party rather than saving their co-workers’ jobs. In this case, a low-key lunch at the office is probably more appropriate. Use the opportunity to speak to the challenges the company has had but let employees know how much you appreciate their efforts and be positive about the year ahead.

Get feedback. Again, this event is about your employees, not you. Sometimes it can feel as if decisions are made in a vacuum by the higher-ups, and the holiday party feels more like a perk designed for executives. Create an employee social committee, preferably with a representative from each department, to get input on the location, decor, entertainment, food, and drink. Give the committee parameters and a budget and have them come to you with ideas on what to do. You won’t make everyone happy, but you’ll increase the chances that it’s well received.

Be inclusive. One of the reasons my aforementioned client’s party is so successful is that the executives are not sequestered away, talking among themselves. Instead, they seat one executive at each table and then, between each course, mingle with everyone in the room.

Express genuine appreciation – employees can see through a false thank you. And don’t grand-stand or make lengthy speeches; thank everyone for their hard work, encourage them to enjoy themselves and wish them a happy holiday. Then get out of the way and let people have a good time.

This Globe and Mail article was legally licensed by AdvisorStream.

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Kendra Sivertson
Certified Financial Planner
Perspektiv Financial