To party or not to party – that is the question CEOs face this fiscally bleak corporate outing season.
The corporate outing has traditionally been valued for its promise of bonding together all the various employees of a company in a single day of family-style fun. So in a year when many companies are struggling economically, corporate heads face a tough choice. Does it really make sense to dig further into the hole and bankroll a day of non-working entertainment for the whole team?
Many CEOs apparently think not. This season, corporate event planners and CEOs alike are reporting that many companies are scaling back the annual company outing, or doing away with it entirely.
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“A lot of companies in Rhode Island, they just don’t have that kind of money. They’re lucky to keep their employees. The outing is the first thing that goes when things fall apart,” said an event planner at one of the largest corporate getaway businesses in the state. The planner, who spoke on the condition that his name, the name of his company and the names of his corporate clients not appear in print, nevertheless gave very revealing information.
His firm, which books corporate getaways for companies throughout New England and as far away as New York, has experienced a staggering 25 percent drop-off in its business this corporate outing season. That decline in booking has translated into a loss of “a couple of hundred thousand” in revenue, he said.
One of the firms biggest corporate clients, which booked a $65,000 daylong event for 700 employees each of the last three summers, is not doing an outing of any sort this year, said the planner.
Typically, companies book outings months in advance. But this year many companies that are having the annual outing are scrambling to throw together a gig just a few weeks ahead of time, industry insiders report. And companies that typically book their holiday parties in the summertime are taking a wait-and-see approach this year.
“The corporate market basically is not booking far out anymore,” said the planner. “They don’t have the money, so they don’t want to tell their people they’re going to do it if maybe they can’t.”
Yet precisely because of the lean financial times, some corporate heads fear that doing away with the outing sends a bad message to their employees – that their industriousness and team effort is least appreciated at a time when it’s most needed. That the family is breaking apart.
”The summer outing is one of those warm security blanket things. You cancel the summer outing and it becomes a signal of an entirely different kind,” said Michael Trainor, CEO of Trainor Communications Group in East Providence. “Especially in today’s economy, when employees are reading in the paper about mega-layoffs all around them – you do the annual outing and it sends a signal that everything is OK.”
So this summer same as any, Trainor Communications, a public relations and marketing firm, will hold its yearly shindig.
“It’s not such a large budget item that it needs to be curtailed,” said Trainor.
Instead, several company heads reported they had deciding to do a no-frills outing. Small companies especially simply can’t afford to break the bank. Forget the day on the yacht – dogs and burgers in the backyard will suffice. It’s the sentiment that counts.
Corporate event planners hope that business will return with a healthier economy. But some companies decide every year to end their tradition of booking a single, big outing day for the entire firm for several reasons, say experts. Some companies get too big. Others decide the money it costs to stage a one-day event for staff is better spent in other ways. Instead, many companies spend it on little tokens of gratitude spread throughout the year.
“A decade or two ago, we used to go to one of these big places for the outing.
They stopped that, just because we got too large for it as a company,” said Victor Calabretta, executive vice president of operations in the Providence office of the Maguire Group. The company, an architecture and engineering firm, has 12 offices spread throughout the Northeast and the U.S. Virgin Islands.
“For us, the outing was primarily one big day where you really spend all your money in travel. You really don’t get that much return,” said Calabretta.
Having done away with the annual outing, the Maguire Group now provides employees with tickets to Paw Sox games, and holds an interoffice golf tournament and a Thanksgiving turkey raffle, said Calabretta. The company did well last year, he said, so the company leadership gave everyone an extra paid day off during the holiday season.
”Christmas was on a Tuesday, and we gave everyone off that Monday,” said Calabretta. “We figured, if you’re going to make a major investment on the behalf of your employees, people appreciate it most in their paycheck.”
