A word of caution before cancelling Christmas

In the tough economic climate, corporates might be tempted to cancel their year-end staff or client functions. 

This can have unintended but far-reaching consequences from reputational damage to reducing staff morale. Rebecca Robinson, group, conference and meeting specialist at Dabchick, says that she has not seen a move towards cancelling events, despite the economy, but adds that enquiries for year-end functions have trickled in slowly.

While cancelling the event can be tempting as a way to save money, Robinson says that having the event, even if it is scaled back, is important because of the bad economy. “Morale can take a knock if the year-end function is cancelled, precisely because of the economic climate. It’s been a tough year, everyone knows that, so it’s important to do something.” She suggests that corporates scale back, and have a dinner for staff, instead of overnight somewhere, for example. 

Rudi van der Vyver, ceo of the Southern African Association for the Conference Industry (SAACI), says if the function has to be cancelled, communicating it correctly is critical.

“If the staff know, for example, that the company has been under pressure, if the company has been honest about it throughout the year, then continue with that honesty for why the event has been cancelled.” 

But, Van der Vyver warns, companies must still be careful not to cause a panic amongst staff. “Remember, especially with the economy as it is, people are scared of retrenchments, of losing their jobs. Coming out and saying that there is no money for a year-end event will make some employees feel that their positions are not secure.” This is especially true if staff have not been made aware of financial or budgetary concerns within the company throughout the year.

Van der Vyver also cautions that not cancelling the event can also have unintended consequences. “If the objective of the event is to raise staff morale, how do you explain to staff that there is no money for year-end bonuses, but then spend a lot of money hosting a big year-end event?” This can actually cause staff morale to drop.

For client functions, cancelling the year-end event can often mean that certain opportunities for client engagements are missed. “Unless the year-end event has become a tradition, clients won’t miss it much. But it is an opportunity for engagement with clients that will then be missed. Often these events function as a way to launch a new product, or to strengthen existing relationships.” And cancelling them, he says, can often send the wrong message to clients. “You don’t really want all your clients to know you don’t have money.”

There is also the danger that the cancellation is not communicated effectively. “If a client is unaware that the event has been cancelled, for example, they may think they simply have not been invited. Your relationship with them may be impacted, and will have to then be mended at some point.” 

Instead of cancelling, Van der Vyver says the trend at the moment, especially for medium-sized businesses, is to move away from year-end functions and towards hosting start-of-year functions. “Companies are either going for start-of-year functions, or having their year-end events earlier in the year, around September.”

Sometimes, there is little option but to cancel the event altogether. But there are ways to do it that can still benefit the company. “What we saw in 2013 was that instead of having the year-end event, companies took some of the funds and instead donated to charity.” Instead of informing clients or staff that the event has been cancelled, you can communicate that instead of spending money on the event, money will be given to a worthy cause.

If cancelling your year-end function is not an option, see Van der Vyver’s tips on how to reduce costs, without it being obvious.

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