Social Capital in the Workplace: Everything You Need to Know

9 min read |

Last Updated on 27 February 2025

What if the biggest factor in your career growth and workplace happiness isn’t your skillset, but the relationships you build at your workplace.

I am sure this is going to be surprising and interesting at the same time.

Research also suggests that, quality of friendships at work are intertwined with job satisfaction. And I bet many of you’ll agree with this.

After all, having colleagues we trust, supportive leaders and a culture that values us is no less than a blessing. It makes the workplace feel like a breeze. And not to mention its impact on productivity and overall satisfaction.

Now, this is the very essence of social capital. In fact, organizations that invest in building strong social capital create happier employees.

But there’s a catch! Social capital doesn’t just happen on its own. It needs to be nurtured.

So, in this article, we’ll explore practical ways to build and strengthen workplace relationships so that both individuals and organizations can thrive.

If you ask me to explain social capital in a single sentence, I’ll say,

“It’s not what you know, but who you know.”

Social capital goes beyond just having connections. It’s more about the value those relationships bring. In the context of the workplace, social capital fuels knowledge-sharing, trust, and even career opportunities. That’s how valuable social capital is.

But if you ask me for a more straightforward definition, my response would be,

Social capital refers to the value derived from an individual’s relationships, network, and sense of community. It influences several aspects of life. From career growth to well-being, simply, by fostering trust, collaboration and mutual respect.

Moreover, it encompasses personal connections, collective engagement, and shared norms that strengthen both individuals and organizations.

With this let’s try and understand some of its types.

Social capital isn’t a one-size fits all concept. And not all social capital is the same. It often comes in three distinct forms, each shaping workplace culture in its own way.

Strong-Team-Connections

Social capital is more or less like a glue that holds the team together. It’s about trust, camaraderie, and support your employees share within their teams.

An organization with strong bonding effortlessly creates an environment where employees can rely on each other. Consequently, leading to higher engagement and lower turnover.

As highlighted in a SHRM survey,

85% of U.S employees who have close friends at work say friendships have positively impacted their careers. Additionally, employees with close workplace friendships are 86% more likely to feel satisfied in their jobs compared to those without such connections.

If you ask me the difference between bonding and bridging social capital, I will say:

Bonding capital keeps teams tight knit. On the other hand, bridging capital helps break down silos. Now, this happens when your employees step outside their immediate circle to connect with people across different departments.
It’s where fresh ideas spark, innovation happens, and teams work toward shared goals instead of staying in their own bubbles. Without bridging capital, organizations can become disjointed, with teams working in isolation instead of as a united force.

You can start with encouraging cross-team projects and casual coffee chats to break silos and spark collaboration.

Stronger-Coaching-Culture

Linking social capital is all about your team members connecting with leadership. And no, it’s not just about having an "open-door policy" (because let’s be honest, that’s not always enough). True linking capital happens when leaders actively engage with employees, mentor them, and make them feel heard.

Have you heard about Google’s “20% time” policy? If you haven’t let me break it down for you.

Google’s famous “20% time” policy allows employees to spend 20% of their workweek on projects outside their primary roles.

Google knows such initiatives foster bridging capital by encouraging collaboration across teams. It brings together people with different skills and perspectives. In fact, it also strengthens linking capital by giving employees a chance to work on projects with senior leaders.

Here I am sure you’ll be interested to know the impact of this policy.

Well, groundbreaking innovations like Gmail, AdSense, and Google News, all were born from this approach.

Fascinating, right?

Now that we know the meaning, its types, as well as real-world application, let's move further with a simple question: Is Social Capital really a Capital?

Social capital might not seem like a traditional asset at first glance. But research suggests otherwise. Here’s why:

1. Drives Economic Value

Trust, shared norms, and strong networks contribute to higher economic output. Suggesting that social capital functions as a real asset with tangible benefits.

2. Requires Investment and can Depreciate

Just like your financial capital, social capital grows when you invest time and effort into relationships. But it can also decline. Sometimes unexpectedly, if trust corrodes or connection weakens.

3. Benefits can be Exclusive

Individuals gain personal advantages from their networks. And have the power to decide who gets access. Likewise, societies that cultivate strong collective trust tend to be more cohesive and prosperous. But those lacking it may struggle with division and exclusion.

4. Is it STOCK or a FLOW?

This raises a deeper question: Are trust, norms, and networks stand-alone assets, or are they byproducts of a more fundamental resource?

If social capital is a stock, it means trust, norms, and networks are stable resources that people and communities can build over time. At the same time, rely on when needed. But if it’s a flow, these elements may come from a deeper source. Sources like cultural values, shared history, or institutions that continuously shape and refresh social connections.

What is the real foundation of social capital? Is it something we can build and keep, or is it constantly changing, shaped by deeper social forces?

Well, understanding this can help us better grow and maintain social capital in workplaces, communities, and the economy.

While discussing business success, we often highlight strategy, technology, or financial assets. However, we sometimes miss a crucial element- social capital.

But missing it is never a good idea. Since social capital encompasses the trust, relationships, and networks that drive collaboration, innovation, and overall performance. Its influence is more significant than you might realize.

1. Stronger Workplace Bonds= Higher Retention & Job Satisfaction

Stronger-Workplace-Bonds--Higher-Retention---Job-Satisfaction

Employees don't stay at a job solely for the paycheck. They stay because they feel connected. It’s no wonder, when strong relationships exist at work, engagement and motivation increase, and turnover decreases.

Patagonia serves as a notable example.

The outdoor apparel company is renowned for its employee-centric culture. It offered benefits like on-site childcare and flexible schedules. Historically, this approach resulted in an impressive 4% employee turnover rate, significantly lower than the industry average of 13%.

Employees here felt valued and connected, leading to higher retention and job satisfaction.

However, recent developments indicate a shift. Facing economic challenges, Patagonia has implemented operational changes, including layoffs and stricter performance metrics. These adjustments have led to employee dissatisfaction and concerns that the company is moving away from its foundational values.

This evolution underscores the importance of maintaining social capital. Even companies with a strong foundation must continually nurture workplace relationships to sustain employee satisfaction and retention.

Social capital plays a pivotal role in enhancing knowledge sharing within organizations. Studies have demonstrated that robust social networks can significantly increase the likelihood of knowledge exchange among employees. For instance, research indicates that strong internal social capital positively influences knowledge-sharing behaviors. Ultimately, leading to improved organizational performance.

Moreover, the informal interactions often referred to as "watercooler moments" have been shown to foster innovation. A study from the MIT Media Lab highlights that these spontaneous encounters can lead to increased collaboration and the generation of novel ideas.

3. Better Connections= Higher Productivity & Performance

Better-Connections--Higher-Productivity---Performance

A team built on trust works like a well-oiled machine. Collaboration just flows naturally. Work gets done faster, ideas are shared more freely, and projects move forward without unnecessary roadblocks.

On the flip side, when that trust is missing in your workplace, things can quickly fall apart. Miscommunication creeps in, your teams become disconnected, and productivity takes a hit. It's the difference between a team that works seamlessly together and one that's constantly struggling to stay on the same page.

Social capital just doesn’t happen out of blue. You’ve got to build it intentionally into your company culture. Your organization must put conscious efforts into making social capital a priority.

So, to help you in doing that, here are some practical strategies:

1. Creating a Culture that Rewards Relationship

An organization’s culture should encourage and reward meaningful connections. Not just individual performance. Too often, businesses focus only on traditional KPIs like sales numbers or project deadlines. But while doing that, overlooking the importance of teamwork and mentorship is never a good idea.

Want to know a way to fix this? Try Relational KPIs.

These metrics track things like

cross-team collaboration,
mentorship efforts, and
knowledge-sharing.

Your employees must know that their ability to build strong relationships matters just as much as their technical skills.

Do Give a Read: 10 Ways to Create a Great Company Culture

2. Designing Workplaces & Hybrid Strategies to Enhance Connection

Workplaces should do more than just house employees. They should encourage meaningful interactions. Simply, setting up a physical office or remote setup is not enough. Your company must design an environment that makes it easy for people to connect.

In offices: You must plan open layouts, shared spaces, and casual meeting areas encouraging spontaneous interactions. Space should spark creativity and problem-solving. A great example is Airbnb’s “Intentional Collision” strategy, where office spaces are designed to increase unplanned encounters between employees.

In hybrid/remote settings: Virtual spaces need to replicate those “watercooler moments.” You can also schedule casual check-ins, interactive Slack channels, or virtual co-working sessions to help your remote teams stay connected.

Never forget what you’re aiming for. Your goal is to make it effortless for employees to build relationships, wherever they are.

3. Leveraging Technology without Replacing Human Interaction

The technology you’re focused on must enhance connections. It must not replace the need for connecting with one another. Although AI and data analytics can track workplace relationships, identifying who collaborates most often and where silos exist is important.

I am sure you’re aware that emerging tech like blockchain is being explored to track workplace interactions. It’s used with the aim of ensuring fair recognition of contributions.

But always keep in mind that no tool can substitute genuine relationships. Businesses that successfully integrate technology while keeping human connections at the core will build the strongest social capital.

Conclusion

At the end of the day, business success isn’t just about strategies and numbers. It’s about people. The connections employees build, the trust they share, and the way they collaborate all shape how work gets done. Teams with strong social capital communicate better.

But the truth is, social capital doesn’t just happen on its own. It needs to be nurtured.

So, take a step back and ask yourself:

Are people in your organization truly connected, or are they just working side by side?
Are leaders accessible?
Are different teams actually talking to each other?

If the answer is not really, then it’s time to make some changes.

Sanjeevani Saikia is a Content Marketing Specialist at Vantage Circle and a voice behind the Vantage Influencers Podcast. As a writer and podcast host, Sanjeevani is dedicated to exploring and promoting recognition-rich, people-first cultures. Through her writing and conversations with HR leaders from around the world, she brings critical industry insights to the forefront. For any related queries, contact editor@vantagecircle.com.

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