Workplace Friendships Are Critical to Talent Acquisition, Retention

The saying “everything is better with friends” holds true at work, according to a recent KPMG survey of 1,019 full-time American workers. The professional services firm found that most employees would trade 20% of their salary to work with close friends. In addition:

• 90% of the surveyed workers said they need a friendship-enabling culture when considering new opportunities.
• 57% said they would accept a job paying 10% below market if it meant having a close friend at work rather than take a role 10% above market without that connection.

“Human connection has become the new workplace currency,” said Sandy Torchia, the vice chair of talent and culture at KPMG U.S. “This finding reveals a fundamental shift in what employees value. We’re not talking about casual workplace chitchat; we’re talking about relationships that fuel productivity and spark innovation.”

This shift creates space for employers to become “social architects” — or as Torchia put it, engineering workflows that naturally bring people together around common goals, providing spaces and time for informal interaction during work hours, and using technology to facilitate connection rather than replace it.

For total rewards (TR) and HR leaders, the challenge is creating relationship-centered strategies with connection as a core system that drives job performance and employee well-being. This article delves into this a bit deeper, providing context and helpful insights.

“Human connection has become the new workplace currency.” 
— Sandy Torchia, vice chair of talent and culture, KPMG U.S.

Rise in Loneliness

Feelings of isolation are increasing in the workplace. KPMG’s report found 45% of respondents cited loneliness — nearly double the rate from 2024.

Additional data from risk management and consulting firm Gallagher also showed a drop in employees feeling like they are part of a team and recommending their workplace to friends, said Morgan Todd Ledford, the firm’s managing director of people development and insights.

“Loneliness isn’t a side effect — it’s a signal that culture needs a reset,” she said.

For example, remote and hybrid work; increased workloads; and political, social and health factors all can play a role in the rise in loneliness and disconnection. Additionally, economic instability has led many employers to cut costs and scale back on social and people programs.

“What we’re seeing is that organizations are in survival mode, focused on outcomes and perhaps not intentionally designing for connection. And in some cases, organizations are actually de-prioritizing their people, programs and recognition. … As a result, social touchpoints [decrease],” said Emma Harvie, the global head of recognition and rewards insights at Achievers, an employee experience and recognition platform.

Benefits of Belonging

The KPMG survey found 87% of workers said friendship-enabling work cultures are crucial for talent retention, and 1 in 4 cited increased productivity and motivation to go beyond job requirements as the leading benefit.

“This shows that retention and recruitment can no longer rely solely on compensation or career growth,” said Andrew Shatte, the chief knowledge officer and cofounder of meQuilibrium, a workforce performance, engagement and well-being platform. “Companies must intentionally design cultures where authentic relationships can form and thrive, making connection a strategic advantage.”

The benefits of connection and a supportive work environment can extend past retention. For example, close friendships at work are linked to higher engagement, productivity and well-being, and are a central theme in research conducted by Achievers on five pillars of belonging.

“Employees who are recognized frequently are far more likely to feel a sense of belonging and report higher productivity levels,” Harvie said. “People won’t go the extra mile for a KPI [key performance indicator]. They go the extra mile for the team that they’re working with.”

Those connections also can help keep people satisfied with their employer. “When talent is evaluating whether to stay or go, what often keeps them with an organization or makes it easy for them to say goodbye are those human faces and those people they have worked with and feel a sense of loyalty to,” said Tamara Rodman, the senior client partner of culture, change and communications at consulting firm Korn Ferry.

“People won’t go the extra mile for a KPI [key performance indicator]. They go the extra mile for the team that they’re working with.” 
— Emma Harvie, global head of recognition and rewards insights, Achievers

Creating Connection

In an effort to escape the feeling of loneliness, many workers are turning to artificial intelligence (AI) companions. Surprisingly, 99% of KPMG survey respondents said they were open to the idea of AI workplace friendships.

“AI can simulate empathy, but it can’t truly understand or care in the way another person can,” said Michele Herlein, the founder and CEO of CultureMax, an organizational development consulting firm. “If we start leaning too heavily on it for emotional support, we could unintentionally make people feel even more isolated.”

Instead, design a relationship-centered workplace focused on connection, not just efficiency, noted Deb Smolensky, the vitality and well-being solutions global practice leader at workforce advisory firm NFP.

“Creating a workplace of belonging and building connections should be in the HR strategy and supported across all employee experience and touchpoints,” she said.

The experts in this article agree that designing for connection at work requires more than perks; it requires intentional structure and activities, such as:

• Implementing employee resource groups (ERGs). According to Achievers’ Harvie, research shows employees at organizations with ERGs have higher levels of connection, and create spaces where employees can be themselves at work and meet like-minded coworkers.
• Embedding recognition programs. Recognition should be embedded across every social and people program to amplify initiatives, said Harvie. Achievers data shows 91% of employees would put in more effort if their contributions were noticed and valued — and 67% said recognition would inspire 20% to 50% more effort.
• Empowering your people. “Encourage check-ins that go beyond project updates to include discussions about well-being, workload and stress,” said meQuilibrium’s Shatte. “Offering leadership training and professional develop is also imperative to talent attraction and retention.”
• Cultivating engagement. Jennifer Schielke, the CEO and cofounder of staffing and recruiting company Summit Group Solutions, suggested initiating small, strategic actions to foster collaboration and connection. For instance, celebrate employee anniversaries or accomplishments and connect on topics of personal meaning. “Activities do not have to be complex or costly; they just need to reflect your genuine appreciation for the teams that fuel the success of the organization,” she said.

According to KPMG’s Torchia, the future of work rests on connection. “The organizations that create friendship-enabling ecosystems will unlock the collective human potential that drives sustainable competitive advantage,” she said.

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Employee Experience
• Employee Recognition
• Well-Being
• Workforce Engagement