Why Workplace Relationships Drive Employee Engagement and Retention
- Rachel Simon
- Mar 25
- 5 min read
Updated: May 7
When I talk about workplace relationships in my keynotes and with executives, the conversation usually starts in a very human place.
People share stories about a manager who believed in them, a colleague who helped them through a difficult project, or a mentor who opened an unexpected door.
Those relationships shape our careers in powerful ways.
But at some point, a leader will ask a very practical question:
“What does this mean for the business?”
It’s a fair question. Organizations are focused on results, performance, and outcomes.
The good news is this: workplace relationships are not just meaningful on a personal level. They are one of the most underutilized drivers of business performance.
And the data backs it up.
The Data Is Clear: Relationships Drive Performance
Let’s start with employee engagement, because it’s one of the biggest challenges organizations face today.
According to Gallup, only 23% of employees worldwide are engaged at work.https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx
That means the majority of employees are either disengaged or actively disengaged.
Gallup has also found that employees who have a best friend at work are significantly more likely to be engaged, produce higher quality work, and stay longer.https://www.gallup.com/workplace/236213/why-need-best-friends-work.aspx
One of the most powerful predictors of engagement isn’t compensation, perks, or even the work itself.
It’s relationships.
Harvard Business Review reinforces this idea, noting that a sense of belonging and connection at work leads to higher performance, lower turnover, and increased job satisfaction.
So when we talk about relationships at work, we’re not talking about something “nice to have.”
We’re talking about a lever that directly impacts engagement, retention, and performance.
A Real Workplace Scenario: When Relationships Are Strong
Let me give you a real-world example that I’ve seen play out many times in large organizations.
A cross-functional team is working on a high-visibility initiative.
There are tight deadlines. Multiple stakeholders. A lot of moving pieces.
But here’s what’s different:
The team members already have relationships with each other.
They’ve worked together before. They trust each other. They know how each other operates.
So when challenges come up (and they always do), the dynamic looks like this:
Someone reaches out quickly instead of waiting
A tough conversation happens early instead of being avoided
People assume positive intent instead of jumping to conclusions
Decisions get made faster because trust already exists
The work still isn’t easy.
But it moves.
There’s momentum.
The Contrast Scenario: When Relationships Are Missing
Now let’s take the exact same project.
Same goals. Same timeline. Same level of complexity.
But this time, the team members don’t have relationships.
They don’t know each other well. They don’t trust each other yet. They’re hesitant.
So what happens?
Emails replace conversations
People copy extra stakeholders “just to be safe”
Feedback is softened or avoided entirely
Misalignment lingers longer than it should
Small issues turn into bigger ones
And suddenly, the project slows down.
Not because the team isn’t capable.
But because the relationships aren’t there to support the work.
This is what I mean when I say:Work becomes less effective, more siloed, and more frustrating when we go it alone.
Why Relationships Improve Collaboration
Modern organizations are complex.
Very few initiatives are completed by a single person or even a single team. Most work requires collaboration across departments, functions, and levels.
Strong relationships act as a shortcut.
They reduce friction.
They make it easier to:
Ask for help
Share ideas
Solve problems quickly
Navigate the organization
Without relationships, collaboration relies on process.
With relationships, collaboration relies on trust.
And trust is always faster.
Why Relationships Increase Employee Engagement
If engagement is low globally, the natural question is: what actually moves the needle?
Gallup’s research consistently points to one key factor: connection.
Employees want to feel:
Seen
Valued
Supported
And those feelings don’t come from strategy decks or town halls.
They come from people.
Managers play a critical role here. In fact, Gallup has found that managers account for at least 70% of the variance in team engagement.
Engagement isn’t driven by programs.
It’s driven by relationships.
Why Relationships Improve Retention
Turnover is expensive.
Gallup estimates that replacing an employee can cost one-half to two times the employee’s annual salary, depending on the role.
People stay where they feel connected.
They stay where they have:
A manager who invests in them
Colleagues they trust
A sense of belonging
And they leave when those things are missing.
“I like the work… I just don’t feel connected to the people.”
I hear that all the time in coaching.
That’s not a role issue.
That’s a relationship issue.
Why Relationships Strengthen Leadership Effectiveness
Leadership happens through people.
Ideas don’t move forward because they’re good ideas.
They move forward because people trust the person behind them.
Harvard Business Review highlights that trust in leadership is a key driver of organizational performance and alignment.
Leaders who invest in relationships:
Gain buy-in more quickly
Navigate resistance more effectively
Build stronger, more connected teams
In a world of constant change, relationships are what hold organizations together.
How to Start Building Better Workplace Relationships
If this all sounds right, the next question is usually:
“Where do I start?”
Here are five simple, practical ways to begin:
1. Be intentional, not accidental
Most relationships at work happen by proximity or convenience. The strongest ones happen by design. Identify 2–3 people you want to build stronger relationships with and take the first step.
2. Make the small moments count
Relationships are not built in big, formal meetings. They’re built in quick check-ins, follow-ups, and casual conversations. A five-minute connection can go further than a one-hour meeting.
3. Ask better questions
Move beyond “How’s the project going?”Try: “What’s been most challenging lately?” or “What’s something you’re excited about right now?”Better questions lead to better relationships.
4. Follow up and follow through
If someone shares something important, circle back. Remembering and revisiting conversations builds trust quickly.
5. Don’t wait until you need something
The worst time to build a relationship is when you need help. Invest early, so the relationship is there when it matters.
The Bottom Line: Relationships Are a Business Strategy
We are operating in a world filled with data, technology, and rapidly evolving tools.
AI is changing how work gets done.
But beneath all of that complexity, one thing hasn’t changed:
Work still happens through people.
People solving problems together.
People sharing ideas. People supporting each other through challenges.
And those moments are powered by relationships. So when we invest in workplace relationships, we’re not just improving culture. We’re improving how work gets done.
We’re increasing engagement. We’re reducing turnover. We’re accelerating collaboration.
That’s not a “nice to have.”
That’s a business strategy.
If you’re thinking about how to strengthen relationships within your team or organization, I share more insights, frameworks, and resources at www.rachelbsimon.com.
About the Author
Rachel B. Simon is a former AT&T executive who spent more than three decades in leadership roles across customer care, finance, and privacy. She is now a keynote speaker, executive coach, and best-selling author of Relationships at Work: How to Authentically Network Within Your Company.
Rachel speaks to organizations around the world about how stronger workplace relationships drive engagement, retention, collaboration, and performance. Her work helps leaders and teams move beyond transactional interactions to build meaningful connections that move the business forward.
Learn more at www.rachelbsimon.com.
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