Fostering Friendships: The Game Changer in Employee Retention
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While employee turnover has stabilized since the Great Resignation, turnover risk has surged to its highest level in nearly a decade. According to a recent Gallup report, more than half of U.S. employees (51%) are either watching for or actively seeking new job opportunities—a continuation of the rising trend seen in recent years. A subtle shift in the economy or job market could trigger yet another exodus.
HR professionals generally highlight three key factors that drive turnover risk: inadequate compensation, limited career growth, and lack of workplace flexibility. Inadequate pay and bonuses top the list, with 74% of HR professionals citing it as a primary reason for employees leaving. A lack of growth opportunities follows, with 61% noting career stagnation as a major cause. Finally, 43% of HR professionals point to insufficient workplace flexibility, emphasizing the growing importance of remote work and adaptable schedules in retaining talent.
But what if there was a secret weapon to minimize the turnover risk—one that doesn’t involve raising salaries, offering promotions, or changing work structures? Organizations that actively encourage friendships among colleagues gain a powerful retention advantage. According to a recent survey, 76% of employees with close friends at work are far more likely to stay with the organization. Another study reveals that most workers see friendships as a critical factor in their decision to remain at a company. In the fight to retain key talent, fostering meaningful relationships could be a game changer.
This notion is supported by traditional network science, which suggests that employees on the periphery, with fewer connections, are far more likely to leave the organization. These studies find that turnover risk is generally higher for peripheral employees as they have limited access to information and therefore have a lower sense of belonging. One of these studies found that an employee’s position in the network can predict turnover with 85% accuracy. This is especially true for friendship networks. This underscores the importance of cultivating employee networks and providing opportunities for developing connections with colleagues. Remarkably, another study found that fostering these connections can reduce turnover risk by as much as 140%.
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Armed with these insights, a mid-sized technology company discovered firsthand the power of friendship connections at work. The company operated in an optional hybrid work model and wanted to cultivate employee connections without enforcing a return-to-office mandate. Rapid growth during the pandemic had diluted overall employee connectedness, and the ensuing hybrid model limited collaboration across offices and departments. By strengthening connections, the company hoped to boost knowledge sharing and communication across teams and areas of expertise. The goal was to extend trust networks, either by facilitating new relationships or deepening existing ones, which in turn helped mitigate retention risk by identifying and engaging both peripheral and well-connected employees.
To enhance workplace connections, the organization utilized the Thred platform, which employs an interest-based matching algorithm to foster meaningful relationships among employees. They facilitated strong social connections through specific 1:1 interactions (called “Stitches”) centered around shared personal interests. Following these events, they evaluated their impact using organizational network analysis alongside passive data, including turnover rates.
The results were striking. Initially, a diagram of nearly 200 employees (figure 1) revealed minimal interdepartmental connections (colored nodes), with many isolated individuals on the network's periphery. After the events, the network transformed significantly (figure 2), showcasing increased connectivity, as indicated by new connections (blue links) representing friendships formed across various departments.
Figure 1. Pre-events Network
The impact on turnover was even more notable. A year later, the separation rates highlighted a stark difference between employees with and without friendship connections. Those who had not formed any friendships before or after the program experienced a separation rate of 47%, while those who started with none but then made at least one friend saw their separation rate drop to 28% on average. This demonstrates the profound effect that fostering workplace friendships can have on employee retention.
Figure 2. Post-events Network
Research shows that employees with strong social connections at work are significantly more likely to stay. By focusing on building these relationships, organizations can create a powerful retention strategy without needing to overhaul compensation structures or workplace policies. HR professionals should consider implementing the following practices:
Creating opportunities for employees to connect. This can be done by organizing regular networking events, both virtual and in-person. These gatherings, such as lunch-and-learns and interest-based meetups, encourage interaction among employees from different teams. Leveraging technology platforms can facilitate meaningful 1:1 interactions through interest-based matching, helping to broaden networks and enhance communication across the organization. Additionally, encouraging cross-department collaboration through projects that require employees to work together can further strengthen these connections.
Actively encouraging friendships among colleagues. This can be achieved by creating social clubs or interest groups that foster bonding outside of professional roles. If possible, such groups ought to be employee led to help with adoption. Implementing mentorship programs can pair employees with mentors in different departments, promoting relationships and knowledge sharing. Recognizing and celebrating workplace friendships through formal acknowledgment can also highlight the importance of social connections.
Evaluating the level of connections within the workplace is crucial. Conducting organizational network analysis can help assess the strength and breadth of employee relationships, identifying those who may be isolated and in need of support. Gathering employee feedback through surveys about their workplace relationships and monitoring engagement metrics, such as participation in connection events, can provide valuable insights into the effectiveness of connection-building initiatives.
Creating an environment of belonging is essential. Organizations should implement diversity and inclusion initiatives to ensure all employees are valued, respected, and supported. Encouraging open communication through regular forums or feedback sessions can foster a culture where employees feel comfortable sharing their thoughts and experiences. Supporting employee resource groups (ERGs) that allow individuals with similar backgrounds or interests to connect can further promote a sense of belonging. In general, programming should be as accessible as possible to ensure employees of all neurotypes and physical abilities are included.
By focusing on these actions, HR professionals can cultivate a supportive culture that not only enhances employee engagement but also significantly reduces turnover risk, ultimately contributing to a more collaborative and thriving organizational environment.
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