The cost cutting move could put a dampener on Christmas spirit in the office.
Cards will still be sent out by many firms.
Almost half of small UK companies are not planning a Christmas party this year, which could adversely affect staff morale and productivity, according to a survey by communications firm Pitney Bowes.
A massive 90% of the remaining 52% of SMEs that are organising a function will spend the same or less than they did last year, indicating that cost cutting measures could be the reason behind the low numbers. The average spend per head was found to be £43.80.
A third of businesses are introducing new systems to reduce expenditure over the holiday season such as putting certain employees on call at all times and organising skeleton teams to stay in the office and ensure that business does not suffer over Christmas.
Phil McCabe, senior policy adviser at the Forum of Private Business, said: “Controlling costs is always important, but staff Christmas parties are a valuable way of showing recognition and appreciation of your employees. In turn, good employee engagement delivers bottom line results. Choosing not to recognise staff at Christmas could have a negative effect on morale and therefore productivity so companies need to introduce other ways of motivating – it doesn’t have to be costly.”