Workplace Friendships Decline as Companies Struggle to Retain Employees

Northeast Ohio companies may be losing valuable employees and significant revenue due to a “friendship recession” in the workplace, according to multiple new studies revealing the dramatic decline in workplace connections.

Only 20% of U.S. employees report having a best friend at work, with just one in five actively nurturing workplace relationships, despite mounting evidence that workplace friendships directly impact business performance and employee retention.

The financial implications are substantial. Research from Harvard Business Review shows close work friendships boost employee satisfaction by 50%, while KPMG’s 2024 survey of 1,000 professional employees found that 85% believe workers are more likely to stay with companies where they have workplace friends.

A recent Express Employment Professionals study revealed that 78% of job seekers say they would be more likely to stay with a company if they have friendships in the workplace. Perhaps more telling, 64% of workers have stayed at jobs longer than intended because of workplace friendships, while 32% have left jobs specifically because they could not form friendships.

The decline represents more than a social loss for companies across Ohio. Gallup research consistently shows employees with close workplace bonds are 43% more committed and 27% more satisfied with their jobs. These workers are also 43% more likely to receive recognition and 37% more likely to feel someone at work cares about them as a person.

Oxford professor Jan-Emmanuel De Neve found that workers quit not primarily because of poor management, but because they lack a sense of belonging with their teams. This finding reframes workplace relationships as critical for retention and business success.

The COVID-19 pandemic accelerated this trend, with physical separation leaving employees feeling detached from teammates and eroding workplace community. Remote and hybrid work arrangements have made it more difficult for employees to develop the casual interactions and shared experiences that traditionally fostered friendships.

KPMG’s study found that while hybrid workers place the highest value on workplace friendships, in-office professionals typically have more friends across generations and ethnicities. Four out of five workers say workplace friends provide positive mental health benefits and help them feel more engaged and connected to their companies.

The research reveals workplace friendships serve as essential support systems for celebrating successes, handling challenges and enhancing collaboration. Workers with close friendships at work report these relationships help them feel more resilient during challenging times and foster greater job satisfaction.

Without meaningful workplace relationships, companies risk creating isolating environments that hinder innovation and drive turnover. The University of Kansas found it takes approximately 50 hours of interaction to move from acquaintance to casual friend, while deeper friendships require even more time investment.

Companies with highly engaged workers see 18% less turnover in high-turnover businesses and 43% less turnover in low-turnover companies, according to Gallup. With the average cost of replacing an employee estimated at roughly 20% of their salary, the retention benefits of workplace friendships represent significant cost savings.

Northeast Ohio businesses are encouraged to examine their workplace culture and consider strategies to foster connection among team members. Research suggests companies prioritizing workplace relationships may see improvements in employee retention, job satisfaction, productivity and overall business performance.