A quarter of British businesses are cancelling Christmas this year according to new research from Pleo, a spend management solution for small to medium sized companies.
With the cost of living crisis continuing to hit home for many businesses in the UK, Pleo has found that business leaders are having to make tough decisions this year in relation to bonus payouts and Christmas parties.
Nearly two-thirds (62%) of SMEs (which make up over 99% of businesses in the UK) plan to stop or reduce Christmas bonuses for staff and 60% are planning to reduce or put a stop completely to staff Christmas parties this year. Businesses of all sizes are having to make savings but the scale of the cutbacks is being felt the most by those with 100 to 249 employees.
In 2021, businesses of this size were spending an average of £13,476 on entertainment but this year, that figure is expected to decrease to an average of £10,220 - a reduction of nearly a quarter (24%).
In light of bottom lines tightening, larger-sized companies are opting to reduce spending on staff Christmas spending rather than cancel plans entirely. For those with 250 to 500 employees, 44% say they plan on reducing the cost of their Christmas office party, versus 35% of those with 50 to 249 employees - in contrast, 18% of those with 250 to 500 employees say they plan to cancel the party happening altogether versus the 24% of those with 50 to 249 employees who feel the same.
However, for those Christmas office parties going ahead, a third (33%) of businesses plan on increasing travel expenses for staff to come to enjoy the festivities.
Those SMBs in the legal industry have previously spent large sums on Christmas entertainment, last year they spent a whopping £25,215 on average, but this year their budget has nearly halved, with £13,610 set aside. Similarly, for those striking due to pay in the Education sector, Christmas staff celebrations are not set to boost moods, with budgets halved from £9,236 last year to £4,639 this year.
Additionally, despite the planned cutbacks on Christmas spending and concerns over this impacting staff morale, businesses have indicated that they are prioritising spending in 2023 on things that staff ‘really value’. Nearly half (48%) of senior decision makers have indicated that while they plan to continue spending less on staff niceties such as social events and work perks in the new year, they instead will be investing in staff through increasing pay, training and providing travel expenses.
“This year has been incredibly tough for businesses and what we’re seeing is yet another example of the financial challenges many of our business leaders are facing," says James Keating, Chief Marketing Officer at Pleo.
"The Christmas period is usually a time for everyone to celebrate the successes of the past year and look ahead to the next but because of the economic environment, many businesses are putting the brakes on those celebrations. We will of course expect businesses to celebrate and reward staff to some degree, but this year in particular will be a little more tempered than what has perhaps happened in previous years.
“A real positive from the increased scrutiny around Christmas spending is business leaders are refocusing their efforts on spending the money within the business. With the money saved on socials, employees could see an increase in pay or more money spent on training which not only impacts employees in a positive way but also the business itself.”
