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10 Tips to Reduce Employee Holiday Party Expenses

Planners Should Consider Pros and Cons When Making Budget Decisions


Some colleagues think that the company event planner has the most fun job in the company: planning the big employee holiday party. This is not always the case, especially when the planner is directed behind closed doors to save money on the event.

So what can he or she present to do to reduce costs? Many options do exist, but when employees have grown accustomed to certain expectations, changes in the employee holiday party will have pros and cons. Consider the following ideas:

1. Schedule the Party During the Day.

Photo Courtesy of The Fairmont Copley Plaza, Boston, MA, USA
As a general budgeting rule for business meals: lunch menus are always more cost effective than dinner menus from restaurants, hotel banquets or independent caterers.

For those organizations that typically hold employee holiday parties in the evening, changing to an afternoon event is one of the most cost effective ways to manage expenses. Estimated Savings: 15-20%.

  • Eliminates the need to use personal time for a company event.
  • Increases the number of venue options available to consider.
  • Reminds everyone that they are at a company event, not a personal party.
  • Reduced attendance because many functions cannot fully shut down.
  • Noticeable change that tells employees the organization is cutting costs.

2. Hold the Party in a Restaurant.

Many more restaurant venue options exist in any given area than traditional hotels and other venues that may require private catering (e.g., museums, libraries, etc.).


By considering restaurants, the planner is able to identify venues at different price points that may not otherwise be optional. And restaurants also have private event spaces. Estimated Savings: 15%.


  • Identifies a variety of ethnic and themed locations for consideration.
  • Reduces the potential need to hire live entertainment.
  • Offers staff an experience and service where they may not typically dine.


  • Required food and beverage minimums may be higher than hotel banquets.
  • Potential of reduced intimacy for the group due to other diners.

3. Move the Event to the Office.

Many organizations already have dedicated space for all employee meetings, either using a lunchroom or auditorium after work.

Hosting the event on-site often requires additional decorating expenses that can drive up costs significantly vs. holding it off-site at a venue that is already decorated with a holiday theme. Estimated Savings: 5%.


  • Increased employee attendance.
  • Ability to incorporate company themes and messages to the event.
  • Reminds everyone that they are at a company event, not a personal party.


  • Increased production costs associated with theme and decorations.
  • Reduced staff productivity from distractions during event preparation.

4. Manage Catering Choices.

Small changes in the catering selections may be made that can result in measurable savings.

Examples: Plated vs. buffet style. Seven course meals may become five. Six passed canopies may be reduced to five, with a small decrease in total pieces. Filet mignon may be replaced with lamb chops. Crab legs are more cost effective than lobster tail. Three dessert choices may be reduced to two. Bar selections may be predetermined in advance. Estimated Savings: 5-10%.


  • It is relatively easy to manage costs at the point of selecting catering.
  • Venues and caterers usually have packaged options based on price.


  • Risk not pleasing everyone's taste preferences.

5. Hire a DJ Instead of a Band.

Band members typically get paid a minimum of $1200-1600 for a three hours, four performers. On the other hand, a DJ charges about half that price. Estimated Savings: 50%.


  • Increased variety of music.
  • Reduced expense associated with entertainment.


  • Risks allowing employees to request inappropriate music.
  • Risks associated with creating too much of a casual party atmosphere.

6. Control Decorating Expenses.

Hotels and other venues are usually already be decorated in neutral holiday themes. Still, some expenses are difficult to avoid: centerpieces, linen rentals, etc.

Planners must still incorporate decorations that are sensitive to the all guests. Try to save money by using complimentary linens, and opt to replace flower centerpieces with colorful candles and bowls of candy when possible. Estimated Savings: 10%.


  • Subtle changes often go unrecognized by guests.
  • Holiday patterned linen rentals can be reduced using plain colors.
  • Planner may incorporate company themes to decorations.


  • The wrong selection of linens may be viewed critically by guests.
  • Decoration expenses may be necessary to expand celebration themes.

7. Eliminate Employee Gifts at the Party.

Remember, the holiday party is considered the employee gift, so it is not necessary to include party favors and other small appreciation gifts.

Some organizations feel it is necessary to give each employee some small gift for attending the event because they feel it is an important element of the event. If the business insists on gifts, opt to raffle a few larger prizes or the centerpieces. Estimated Savings: $10 per person.


  • This change often goes unnoticed.
  • Reduces set-up time needed to showcase presents.
  • Allows the planner to avoid other cost reductions (e.g., catering).


  • Employees who cannot attend (e.g., due to work) will feel they received nothing.
  • Employee gifts can be perceived as another form of award.

8. Request Employees to Contribute for Guests.

This is a sensitive decision, but one that has become easier during the last several years. Remember that this is a business appreciation event for employees.

Although the decision is outside the scope of the planner, the accounting department will decide how much of the cost of the event is an allowable IRS deduction, and that is questionable around personal guests. Solution: establish a fee for personal guests. Estimated Savings: 20%.


  • Increases the accuracy to estimate attendance for budget.
  • Identifies in advance everyone who is likely to attend.
  • Increases accuracy of corporate budgets.


  • Perceived by employees as shifting the expense away from the organization.
  • Reduction in the % of employees who may attend.

9. Hold the Party on Monday or in January.

Event planners understand that they are facing a question of supply and demand. Event spaces quickly fill up in the month of December, and the most popular days are usually Tuesday through Thursday.

Little value may be gained by holding the event on a Friday or Saturday because those days quickly book up with social events at venues. The best option: consider a Monday. Estimated Savings: 0-5%.


  • Employees will still have a long work week ahead of them.

The second best option – and not so popular by employees: consider January when venues often have a lot of availability and willingness to reduce price. Estimated Savings: 10%.


  • Weather conditions may be more difficult.
  • Employees prefer December holiday parties.

10. Host Departmental Parties Instead.

The way to really reduce expenses is to shift the responsibility to each individual department. Smaller gatherings will always be more cost effective than larger ones.

Fewer details are needed, and the individuals within a department are more likely to do all the planning. However, more drawbacks exist with this decision. Estimated Savings: Whatever amount is determined; recommend 15%.


  • Reduced organization resources required.
  • Employees will feel more involved within the department.


  • Most managers do not know how to organize employee events.
  • Some departments will have better parties than others.
  • Greater inconsistencies will exist across the organization.
  • Senior management will likely not interact with employees.

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