The latest research from The Global Payroll Association (GPA), reveals that festive spirit is in short supply this year as work Christmas parties are being cancelled or having their budgets slashed as a direct result of Labour’s Autumn Budget.
The Christmas party has forever been a vital fixture of the workplace, boosting morale and allowing employees to let their hair down after another year of hard work. But this year, it seems that the Grinch has disguised himself as Keir Starmer and stolen the festive spirit from many workplaces.
Businesses up and down the country are feeling the financial strain of upcoming changes to employer National Insurance contributions and the National Living Wage that are due to kick in from April next year. With spare cash in short supply, the idea of throwing a work Christmas party is difficult for some businesses to justify.
This is especially true when you consider that the average cost of a Christmas party comes to £90 per head. For a small-to-medium sized business with 250 employees, this means the cost of a party could be as much as £22,500.
A survey of UK businesses*, commissioned by the GPA, found that 78% usually throw a Christmas party. However, this year only 63% plan to keep the tradition going – a reduction of 15%.
87% of those businesses who will not be throwing a Christmas party say the decision has been made as a direct result of the employer NIC and NLW changes announced in the Autumn Budget.
And if that wasn’t enough to dampen the festive mood, of those businesses who are still planning a Christmas party, 20% stated they would be reducing their usual budget, again as a direct result of the Autumn Budget.
20% of those businesses who do intend to go ahead with their festive celebrations have had to reduce the budget they would usually spend
Melanie Pizzey, CEO and Founder of the Global Payroll Association, says:
“It’s simple Claus and effect – as the government applies downward pressure on businesses, they’ve got less scope to give employees the small, simple perks that have always been part of the workplace.
With more businesses also adopting a more flexible working environment, company events such as Christmas parties provide a rare chance for colleagues to get together in person and let their hair down outside of the workplace environment.
So it’s a real shame to see that so many Christmas cut backs are being made due to the impending changes to National Living Wage and national insurance contributions.
We sincerely hope that cost-cutting measures don’t continue to have a negative impact on the workforce, especially when it comes to even more important matters than the Christmas party, such as accurate and efficient payroll services, effective Human Resources departments, and even vital benefits packages including paid leave for new parents.”
Survey Results