Companies who believe that cancelling their Christmas shindigs will save money in the long-run have been urged not to turns the lights out by the Forum of Private Business (FPB).

Surveys have found that over half of small businesses are expected to do away with the annual festive bash for staff this year, as economic woes continue to mount. But while the business group said it accepted that money-saving cuts need to be made, it urged firms to think creatively about ways to reward staff at the end of the year.

Bosses who cancel parties risk alienating their workers, eroding morale further, and disincentivising staff to go the “extra mile” for their company in future, the FPB warned.

“The benefits of an annual get-together cannot be underestimated,” said FPB’s Chief Executive, Phil Orford. “They encourage communication, motivate staff, and reward them at a time when other perks, such as pay rises and bonuses for many just aren’t an option.”

As alternatives, the FPB has offered money-saving tips for employers considering calling off Christmas.

• Host a low key event

• Make your own entertainment

• Go for lunch instead

• Use discount websites

• Secret Santa

• Decorate the office

“The important thing for employers to remember is that being seen to do something for staff at Christmas, however small the gesture, is far better than nothing at all,” added Mr Orford. “In these tough times, small businesses need to retain their best staff. Motivated workers are a valued commodity and help businesses perform better.”