Page last updated at 15:44 GMT, Monday, 26 October 2009

Office party cutbacks hit firms

Man and woman under mistletoe
Some Christmas parties have been cancelled as firms tighten their belts

Cancelling office Christmas parties could have a damaging effect on small businesses, employers have been warned.

The Forum of Private Business lobby group said entertainers, florists and chefs could suffer if parties were cancelled as the recession drags on.

London events company Concerto group estimates that the festive party market is worth £1bn.

It said its research showed one in five businesses had cancelled their celebrations and half were undecided.

Last year's financial woes led to companies cutting back on the cost of Christmas parties, but this year some are cancelling them altogether.

But the Forum of Private Business (FPB) is urging businesses to try to put one on, to thank staff and keep morale up.

Appreciation of workers

FPB spokesman Phil McCabe said a huge number of businesses were in the supply chain, with implications for businesses and jobs.

Laser Hub in Crawley, West Sussex, hosts corporate Christmas bashes for groups of 50 or so in its indoor arena or function rooms, but has had fewer bookings than expected.

They are a valuable way of saying thank you to employees for their hard work during this turbulent time
Phil Orford, Forum of Private Business

Managing director Andrew Snowdon said bookings were down by a half on last year and he was not expecting to be able to make up the financial losses elsewhere.

Phil Orford, chief executive of the Forum of Private Business, said: "Staff Christmas parties are about recognition and appreciation of workers, not indulging fat cats.

"They are a valuable way of saying thank you to employees for their hard work during this turbulent time.

"In turn, good employee engagement delivers bottom line results."

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