Workplace friendships could be the key to solving UK’s retention crisis 

As UK employers grapple with low engagement, rising turnover and ongoing cost-of-living pressures, new international research highlights a surprising factor in employee loyalty: friendships at work. 

KPMG’s Friends at Work 2.0 survey of 1,000 professionals in the US found that workplace friendships are valued so highly that more than half of employees would accept a 10 per cent pay cut if it meant working alongside close friends. Translated into a UK context, the findings suggest that employers who overlook the social fabric of work may be missing a low-cost, high-impact route to improving retention and productivity. 

The study found workplace friendships are worth the equivalent of a 20 per cent salary premium. That is, employees place as much value on having trusted colleagues as they do on significant pay increases. In an era where one in five UK employers say they cannot afford to match inflationary wage growth, friendship-enabling cultures could provide an alternative lever for keeping talent. 

For UK firms competing in a tight labour market, this matters. Six in ten legal sector employees recently told benefits provider Zest they would switch firms for better reward packages. The KPMG data suggests employers could balance financial constraints with stronger investment in cultural initiatives – such as regular gatherings, social stipends or structured buddy systems – to strengthen connections. 

The survey also highlights a growing risk: workplace loneliness. Almost half of respondents (45 per cent) said they felt “isolated and alone” at least some of the time, nearly double the proportion reported just a year earlier. With hybrid and remote working firmly embedded in the UK, similar patterns are likely here. 

For younger UK employees, the stakes are higher still. Other research from KPMG has shown Gen Z workers are more likely to suffer from financial stress and less likely to have savings buffers. Add loneliness into the mix and the result could be reduced performance, disengagement and health issues – all of which carry direct costs for employers. 

Three in four professionals told KPMG that financial constraints were stopping them from socialising with colleagues outside work. That echoes UK survey data, produced by Zest, which shows workers want practical help with food and energy bills from their employers. Without affordable ways to build social ties, many employees risk missing out on the resilience and wellbeing benefits that friendships bring. 

Perhaps most surprising was the almost universal openness to artificial intelligence in building friendships. Ninety-nine per cent of employees said they would be interested in an AI chatbot that could become a close friend or trusted companion at work. Yet nearly half also warned that technology is creating “false connections” – superficial interactions that undermine deeper relationships. 

For UK employers, this poses a dilemma. Digital platforms may help foster connections across hybrid teams, but they must be designed carefully to avoid replacing genuine conversation with surface-level interactions. 

The implications for the UK are significant. Loneliness has already been described as a “public health crisis” by government ministers. If employers can counteract it through practical support for workplace connections, they will not only improve staff wellbeing but also protect productivity. 

In a competitive labour market where salary budgets are stretched, the value of friendship at work may be one of the cheapest – and most overlooked – solutions available.