How to manage friendships at work

How to manage friendships at work
  • Financial wellbeing
  • 3 minute read

Most of us would agree that, generally speaking, promoting friendship is a very good idea. But what about friendship in the specific context of the workplace? Is it likely to have a positive – or detrimental – effect on workplace performance? As a result, should employers be proactively encouraging – or discouraging – friendships and bonding at work?

Buddy benefits

There is plenty of evidence to suggest that workplace friendships are beneficial for both employees and their employers. A study by US academics found that friendship has a positive effect on group performance. This is potentially due to the ability of friendship groups to “better coordinate resources and actions through shared knowledge and effective communication, and as a result of higher levels of motivation”.

What’s more, a survey by team-building company Wildgoose found that more than half of employees (57%) believe that having a ‘work best friend’ makes work more enjoyable. Nearly a quarter (22%) say they are as, or more productive, as result of being great buddies with a colleague and a similar amount (21%) argue that having a work best friend boosts their creativity.

Another argument in favour of friendship is loneliness – a major issue in the workplace, even before Covid-19 forced many employees to base themselves at home. Back in 2019, job board CV-Library found that over half of Brits (53.6%) suffered from loneliness at work, with four in ten attributing this to having nothing in common with their colleagues.

Staff loneliness is set to become an even more pressing problem for employers in future, especially as more organisations switch to hybrid – or even entirely remote – working practices. With employees spending less time in the office – and potentially starting new jobs entirely on a work-from-home basis – it will be increasingly harder for them to build and maintain relationships with peers.

Concerningly, loneliness could have a negative impact on employees’ mental health, leading to reduced productivity and absenteeism. Research by Close Brothers Asset Management earlier this year revealed that more than half of employees (51%) have already experienced an increase in worries about their mental health due to the pandemic.

Fair for all

Yet while workplace friendships offer many positives, they also present risks to employers, especially when the boundaries between friendship and professionalism become blurred. Employees who become overly relaxed at work may not perform as well as they did previously. Or they may intentionally or unintentionally exclude team members, which could lead to allegations of bullying or discrimination. Additionally, they may turn a blind eye to poor performance when it occurs in a colleague who also happens to be a friend.

The risks are particularly acute in the event of a romantic relationship or a friendship that breaches a hierarchy – for example, a manager is close friends with one of their line reports. In this situation, the manager could be open to accusations of favouritism. Also, if two close friends hold financial roles within an organisation – and may possibly be struggling with their own financial wellbeing – there is a heightened risk of that organisation falling victim to fraud through collusion. 

Employers don’t have the right to intervene in employees’ personal relationships. Nevertheless, they are entitled to act if a work relationship is having a detrimental impact on the organisation – for example, if an employee’s performance is deteriorating. So how can employers promote friendship within teams while ensuring that the workplace remains a professional environment where all employees are treated fairly?

  • Draw up a policy for relationships at work. This policy can cover both friendships and romantic relationships, setting out expectations for how employees should behave vis-à-vis their colleagues in areas such as behaviour, recruitment and promotion, management and conflict of interest issues.
  • Invest in diversity and inclusion training. While workplace friendships bring many benefits, they can have a negative impact on employees who feel excluded from certain friendship groups. Diversity and inclusion training will encourage employees to consider who they are friends with, and how they can be inclusive of a broad range of people.
  • Insist that proper processes are followed. Key processes within the organisation – including processes around promotion, recruitment, reward, training and financial controls – should be transparent and strictly adhered to. This will help to minimise the risks of favouritism and fraud.
  • Organise social events to connect employees with each other. With the easing of Covid-19 restrictions, there will be more opportunities for face-to-face events to complement or replace virtual events. Events help employees to expand their network and get to know other people within the organisation. In its research, Wildgoose asked workers what their employers could do to improve relationships between employees. Nearly half (46%) suggested they hold after-work drinks once a month, while 30% desired a designated office breakout area. Over a fifth (21%) favoured a team-building weekend away and 14% wanted to play sport together.

It is natural human behaviour to want to make friends – which is why workplace friendships are virtually impossible to prevent. And there is no real reason to prevent them. Friendships can be a competitive advantage since they contribute to a positive working atmosphere and help organisations to attract and retain talent. For employers, the challenge is to try to ensure that where friendships exist, they are positive, professional and beneficial to the organisation overall. 

To find out more about how Close Brothers Asset Management can support your business with financial wellbeing, please call 0800 028 0208 or email




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