During today’s uncertain economic times, many companies are considering downsizing their annual Christmas party as a way to cut costs. However, there are employee retention issues to consider when making this decision.

Increasing morale, demonstrating appreciation, and offering reassurance to staff are some reasons that business owners want to go ahead with holiday parties. While a lavish party may not be appropriate, canceling the party altogether may send the wrong message to your employees. Owners want to show that they appreciate their staff and are sensitive to keeping their employees happy, while also not carelessly throwing money away if people’s jobs are possibly at risk if business worsens in the new year.

Ultimately, the decision as to whether downsizing the Christmas party is appropriate will depend on economic conditions, as well as employee retention factors, which will vary from company to company.