Leadership by Geoff Colvin

No holiday party this year? Think again

December 6, 2010: 3:07 PM ET

Even in this weird, fragmented job market, your best people are still getting offers. So how do you keep them from jumping ship? For starters, don't cancel your holiday party.

By Anne Fisher, contributor

With overall unemployment still stubbornly high, you wouldn't think employers need to worry much about people quitting. Yet the biggest buzz in human resources these days is "employee engagement." After all the layoffs, those who are left to do the work -- that is, the folks your company most wants (and needs) to keep -- are burning out.

One clear sign of an epidemic of disengagement: The Bureau of Labor Statistics' latest JOLTS report (for Job Openings and Labor Turnover Survey) notes that employees voluntarily quitting have started to outnumber those being laid off.

The trend is spread over a wide array of industries, most notably in financial services, where 464,000 people quit their jobs in August of this year alone, a big jump from 300,000 in August of 2009. What it means is that, even in this weird, fragmented job market, your best people are still getting offers.

So how do you keep them from giving up on you? A whole consulting mini-industry has sprung up to address this vital question, but one answer is surprisingly basic: Don't stop throwing parties.

Anxious not to seem to be wasting hard-earned cash, 24% of companies in a recent Challenger Gray & Christmas poll reported they plan to skip the holiday celebrations this year. That's more than twice as many as last year, when only 10% of employers surveyed said they would cut costs by foregoing all festivities.

Toning down the open-bar Bacchanalias of yesteryear makes sense, but cancelling parties completely is "a mistake," says Bob Kelleher, CEO of the Employee Engagement Group, a consulting firm based in Waltham, Mass., that specializes in helping companies keep their best performers. Kelleher also wrote a new book called Louder Than Words: 10 Practical Employee Engagement Steps That Drive Results.

"It can seem tough to justify spending on 'frivolous' things in this economy," Kelleher acknowledges. But done right, company get-togethers give people a chance to bond with each other in a refreshingly stress-free way.

Instead of spending big on a fancy restaurant or some other extravagant setting, Kelleher suggests, "have an in-office holiday celebration and invite employees' families to attend." Another idea he says works: Be creative and "host an active or theme type of holiday party, maybe one where employees volunteer as a group for an activity to help out a local charity."

Whatever else you do, Kelleher says, don't forget to "use the occasion to thank people for their efforts and commitment over the past year." Simple, sure, but it may just encourage your stars to stick around.

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About This Author
Anne Fisher
Anne Fisher
Contributor, Fortune

Anne Fisher has been writing "Ask Annie," a column on careers, for Fortune since 1996, helping readers navigate booms, recessions, changing industries, and changing ideas about what's appropriate in the workplace (and beyond). Anne is the author of two books, Wall Street Women (Knopf, 1990) and If My Career's on the Fast Track, Where Do I Get a Road Map? (William Morrow, 2001).

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