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The ROI of Cultivating (Real) Relationships with Your Employees

March 8, 2023

By Paula Ambrozic
Anyone who’s ever had a job knows how important the relationships between people at work can be. From the caring boss to the helpful coworker, positive relationships can improve our day-to-day experiences, improve employee engagement, and even boost retention. And on the flip side, negative employee relationships (or even those that just aren’t positive enough) can have a dramatic impact on how we feel about our jobs.

A 2020 SHRM survey revealed how expansive these issues could be. A majority (84%) of people surveyed said poorly trained people managers are the source of unnecessary work and stress, and over half (57%) said managers need more training on how to better manage people. In a survey by GoodHire, 82% of people said they would consider quitting because of a bad manager.

It’s tough, if not impossible, to detangle a manager’s leadership skills from their relationship-building skills. In many cases, those are one and the same. It’s true that training in leadership and interpersonal skills is valuable, but the best place to start might be with a shift in mindset. Without meaning to, many managers and executives get tunnel vision around business objectives and fail to embrace the importance of building authentic relationships. When team leaders, managers, and executives think about employees as whole people — individuals with unique abilities, interests, and priorities — and invest time and energy in building healthy relationships, everyone shows up feeling more engaged with the organization’s mission, and better quality work tends to follow.  

Here are the best practices we’ve observed in organizations where employees feel seen, heard, and accepted.

Treat people as fellow human beings. Team leaders, managers, and C-level execs: don’t treat employees differently, treat them just as you would family members, neighbors, friends. By making space for humanity in the workplace, leaders will create safety — and earn trust.

A friendly attitude goes a long way. Be welcoming and say hello to people! Ask how they are and inquire about what’s going on in their life. For managers with direct reports, a scheduled weekly touch base can make a world of difference, too. ADP research found that employees who received weekly attention from their manager were 2.7 times more likely to be fully engaged than those who received attention once a month or less.

Be authentic and genuine. Everyone can spot a fake. Engage in conversations with mindful curiosity and create opportunities to be present with people, even (and especially) when work is busy and important deadlines loom. Without authenticity, there is no trust — and worse, a lack of authenticity can erode any trust you’ve already built.

Empathy and compassion rule. When you can, be empathetic and work to understand what it’s like to walk in someone else’s shoes. If you can’t quite get to empathy, lead with compassion, which allows you to address a person’s experience without necessarily understanding how it feels. Learning the difference between empathy and compassion is an important advantage for everyone.

Use active listening skills. Great communication is as much about listening as it is about talking and expressing your ideas. Employees need to be heard to feel valued. Whenever possible, set aside distractions to give employees your full attention, and be genuinely curious about what they have to say.

Pay attention to details. Remembering the little things that matter to your people shows them you care. You don’t have to keep track of every single detail you learn about them or keep complicated dossiers (in fact, don’t!). But if you can remember their dog’s name, that their aging parent has challenges, and that their son plays hockey, you can garner trust and create safety.

Celebrate their victories, both personal and professional. Don’t just be one-dimensional and talk only about work. As always, we don’t suggest prying into the private lives of your team — but it’s perfectly acceptable and advisable to talk about the aspects of their personal lives they feel comfortable sharing, such as an anniversary, marathon training, or a bucket list trip.

Respect their boundaries. Building on our previous point, it’s crucial to be aware of and respect people’s boundaries. This applies to conversations (knowing what is too personal) as well as schedule or time (not contacting them after hours or on the weekends). If you’re unsure of someone’s boundaries, it’s always okay to ask (keeping in mind the power dynamics that might influence their response).

Lead with honesty and transparency. Talk openly and frankly with your people and let them see your humanity. Many leaders consider it a weakness to admit when they don’t know something, but the most successful people will attest that failure is essential to achievement. And this makes you more likable, too. It’s human nature to be attracted to imperfection. Dubbed the Pratfall Effect, even highly competent people can become more attractive to others with a small misstep — something that proves you’re human, just like everybody else.

Willingness to compromise, so there is no imbalance of power. Disagreements are inevitable, and when handled appropriately, can be a healthy part of the work environment. Stay cool, use your active listening skills, and work together to solve the problem.

Building Trust through Relationships

In recent years, there’s been a decline in trust and organizational leaders have the responsibility and opportunity to repair it. Workplaces with a high-trust culture are more effective at attracting new talent, fostering higher levels of employee engagement, and retaining workers longer. And there is no more effective way to build trust than to invest time and energy in building relationships with people at work—your direct reports, your peers, your managers, and even people entirely outside your chain of command. The absence of quality relationships, and thus trust, demotivates people, reduces productivity, increases turnover (and therefore costs), and presents obstacles to your business goals.