Healthy Workplace Relationships Boost Your Bottom Line. Here’s How.

Relationships have been a consistent part of professional activity since the beginning of civilization. Egyptian laborers had to collaborate effectively as they dragged stones to the pyramids of Giza. Serfs had to work together to grow and distribute enough food during the Middle Ages. Arctic explorers had to support one another as they sought the location of the Earth’s two poles.

In the 21st century, the need for workplace relationships endures — even if things like remote workspaces and asynchronous work schedules are changing how workers build and maintain relationships. Despite these challenges, healthy relationships between and among employers and employees must remain a priority for modern professionals not just because they make work life easier. They can directly impact a company’s bottom line, too.

What Is a Workplace Relationship?

When the term “workplace relationship” is used, it can conjure up a variety of different images. Some people might picture intimate connections with coworkers. Others could think of a great boss they’ve had in the past. They might think of group events they participated in, too.

These are all examples of workplace relationships at play. Forbes contributor and editor Chauncey Crail and Rob Watts, respectively, define the concept of relationships amongst coworkers as follows: “Employee relations concerns the building of positive relationships and interactions among employers and employees, and at a broader level helps foster a sense of community within an organization.”

In other words, the umbrella term “workplace relationships” applies to any positive relationship or interaction within the workplace. This is both a vertical and horizontal concept.

Vertical relationships are important as authority figures within a company interact and build connections with those further up or down the org chart. Horizontal relationships are also important, as they knit together coworkers within teams, between departments, and even across branches of a company.

You might even choose to expand the idea to key clients, customers and vendors. There’s no doubt that the quality of those working relationships can have a huge impact on your happiness and success.

The Nuance of “Good” Workplace Relationships

One more thing worth noting here is the understanding of what a “healthy” workplace relationship looks like. The term doesn’t mean everyone is your best friend. On the contrary, much like a family’s natural dynamics, professional relationships come in all forms.

Some coworkers connect so strongly that they become friends, even outside of the office. Others remain acquaintances with their fellow professionals, and still others rub their coworkers the wrong way. This spectrum of interhuman connections is normal.

What matters is that you maximize each relationship to its fullest and most operable potential. Coaching guru Michael Bungay Stanier (popularly known as MBS) addresses this concept in his book “How to Work With (Almost) Anyone.”

Bungay Stanier refers to this optimal relationship goal as “BPR” (Best Possible Relationship). “When you commit to a BPR,” he explains, “you commit to intentionally designing and managing the way you work with people, rather than just accepting what happens. With a BPR you create relationships that are safe, vital, and repairable. That’s the foundation for happier, more successful working partnerships.”

Workplace relationships come in all shapes and sizes. To keep them healthy, you don’t need to turn everyone into your bestie. You simply need to focus on the BPR that each connection offers.

How Do Healthy Workplace Relationships Impact Revenue?

The value of healthy workplace relationships is easy to see. When coworkers have strong relationships, they are happier. They have greater loyalty to their company and feel empowered to thrive within it.

The still-unanswered question is how this impacts your company’s bottom line. Let’s consider how some of the primary benefits of workplace relationships have a positive impact, specifically in the context of revenue.

1. Healthy Work Relationships Lead to Better Retention

When workplaces operate with healthy relationships, they cultivate a greater sense of loyalty within an organization. As people connect in positive ways, they will naturally feel more invested and be less willing to leave.

This leads to a simple (yet significant) cost factor in the form of greater retention and lower turnover. SHRM calculates that the combined soft and hard costs that come with replacing an employee can be as much as three to four times the position’s salary. That is a significant cost for a business.

Technically speaking, this is a form of cost savings, not higher revenue, but it’s important to consider, all the same. When healthy relationships improve retention, it keeps your employees in-house longer, reducing your hiring costs in the process.

2. Healthy Work Relationships Foster Greater Engagement

When employees invest in one another, they feel that they’re part of a larger organizational culture. This offsets the profound sense of loneliness that many modern workers struggle with.

Remote workers often feel disproportionately isolated and a substantial majority find building and maintaining work relationships more difficult than they are in an in-person setting. When a company encourages and facilitates relationship-building within its workforce, it fights this tendency toward loneliness and encourages engagement and happiness.

Happy employees are more engaged which affects revenue. They tend to be more productive, collaborate better, and work with customers more effectively.

3. Healthy Work Relationships Improve Employee Development

Effective vertical workplace relationships are also important for ongoing development. When employers are able to intimately understand their employees, it increases their ability to promote their professional growth.

On the one hand, when issues arise, workers can communicate a problem or need to an employer with confidence, opening the door to collaborate on a solution. On the other hand, when things are going well, employees and employers can work together to find ways for proactive professional growth.

By quickly addressing problems and improving existing skill sets, employees become more efficient. In either case, the result is a net positive for the company.

4. Healthy Work Relationships Provide Greater Insights

It’s no secret that diversity improves a company’s bottom line. In fact, diverse companies have statistically happy employees.

However, to fully unleash the power of DEI initiatives, you have to look past your hiring practices. You have to develop healthy work relationships, as well.

When a diverse workplace prioritizes good vertical and horizontal connections among its coworkers, it exposes those individuals to a variety of perspectives and worldviews. Employees from different backgrounds and experiences feel empowered to speak up and share their personal insights.

How to Improve Workplace Relationships

Understanding the impact that healthy workplace relationships can have on revenue is one thing. Improving your workforce’s relationships to tap into those financial benefits is another. If you’re uncertain how to promote better workplace relationships, here are a few thoughts to get you started.

1. Start Things Off on the Right Foot

In his book “How to Work With (Almost) Anyone” (mentioned above), along with defining BPR, Bungay Stanier provides a blueprint for improving healthy workplace relationships. This centers on an activity that MBS refers to as “the Keystone Conversation.”

This is a conversation that should take place early in a professional relationship. It aims to dig into deep, important work-related questions right away, such as learning how a person has grown from past mistakes or discovering their personal practices and preferences.

The Keystone Conversation accomplishes a few critical things early in a working relationship. It shares responsibility for the relationship, deepens individual understanding, and opens up permission to talk about the serious stuff when things are good as well as bad. If you want to create a structure within which to improve workplace relationships, this is a good place to start.

2. Set Clear Expectations

Expectations are everything — especially when you’re talking about connecting with coworkers that you have to collaborate with on a regular basis. If you set expectations, they create the framework within which a professional relationship can remain effective.

This is where it’s important to remember that workplace relationships aren’t all sunshine and roses. At times, they are practical, and occasionally, they’re simply making the best of an undesirable situation.

Whatever kind of relationship you’re working with, make sure you’re setting expectations. Be clear about what kind of help and support a person should expect from you. Provide feedback and communicate often to keep everyone on the same page. Make sure that everyone, including yourself, understands what to expect and what others expect of them to make the relationship function smoothly.

3. Develop Yourself

Yes, we already pointed out that healthy workplace relationships are an outward-facing activity that is focused on others. However, in order to participate in and build healthy relationships, you need to start with a good, hard, introspective look inward.

What are the relationship-building areas that you need to focus on? Do you need to listen better? Do you lack emotional intelligence? Do you need better people skills?

Identify the key areas where your own ability to build relationships is lacking. Then work on improving those items as you seek to contribute to a healthy, profitable workplace.

Improving Revenue Through Better Workplace Relationships

Workplace relationships are important. On an individual level, they ensure that you have positive experiences as you go about your work.

On a company-wide level, improved workplace relationships are also a major factor in maintaining a healthy revenue stream. They ensure that a company’s primary asset (its workforce) remains positive, focused, and efficient as it collectively works together.

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