Social Capital in the Workplace: How HR Can Build Stronger Employee Connections
We are connecting less frequently, have smaller networks, and spend less time and effort building relationships. Which is why HR needs to invest in people’s social skills to help foster a cohesive, innovative work environment where everyone can work well together, and deliver business results.
In a world increasingly shaped by technology, AI, and global shifts, strong interpersonal skills are more valuable than ever in business. For HR professionals, building social capital in the workplace isn’t just a nice-to-have; it’s essential for improving employee relationships, creating a strong culture, and boosting the company’s performance.
According to McKinsey, teams with a powerful sense of connection are more productive and complete tasks faster. Social capital builds trust between colleagues and managers, motivates employees to go beyond their job duties, improves retention, and makes staff more likely to recommend their company as a great place to work. And HR has a key role to play in fostering these interpersonal relationships.
In this article, we will further unpack why strong interpersonal skills are important – now more than ever – and provide you with steps on how to develop social capital in your organization.
Contents
The need for interpersonal skills in the workplace
What is social capital?
The benefits of social capital
How HR can foster social capital in the workplace
1. Build strong relationships
2. Promote employee engagement
3. Drive innovation and creativity
4. Support organizational resilience
The need for interpersonal skills in the workplace
The world has seen significant shifts in the last few years — fast advancements in technology, changing ways of work, and rapid development and uptake of AI tools, coupled with volatile political, social, and global economic changes. It’s impacted the skills we need to do our jobs and how we connect with others.
The World Economic Forum’s Future of Jobs report indicates a significant change in the skills needed for the future workforce. Out of the top ten skills expected to be in high demand by 2025, eight focus on human qualities like emotional intelligence, creativity, leadership, and social influence.
However, as McKinsey’s survey reveals, we connect with others less frequently, have smaller networks, and spend less time and effort building relationships.
For those in HR, this shows an important point: it’s essential to invest in people’s social skills and foster a work environment where everyone can work well together, innovate, and deliver business results.
What is social capital?
Social capital is about the connections, relationships, and trust built within organizations. These networks help us communicate well, work together, and solve problems. By prioritizing social capital, HR creates a positive environment where individuals and the organization thrive.
This approach is key to increasing employee satisfaction and engagement, sparking innovation, and strengthening the company’s ability to adapt and grow.
Relationships marked by conflict and mistrust will have the opposite effect. Strained relationships lead to limited collaboration, low morale, and higher turnover rates. This can negatively affect both employee and organizational performance.
Social capital is helpful in many ways. As an employee, having a good relationship with a more experienced colleague can mean getting helpful advice on doing their job better. On a group level, social capital makes it easier for different departments to work together to achieve a shared goal. In the broader community, social capital helps unite people around a common cause, leading to action that benefits everyone.
The benefits of social capital
Social capital in the workplace brings many benefits, including increased employee engagement, innovation, and organizational resilience. Strong relationships and networks provide access to expertise, information, and resources.
This boosts innovation, problem-solving, and productivity by tapping into employees’ collective intelligence and creativity. The idea exchange, collaboration, and experimentation that social capital encourages are key for creating new products, services, and processes, giving companies a competitive advantage.
Simply put, social capital improves organizational performance and competitiveness.
For HR, social capital links HR practices to organizational success. In Talent Acquisition, for example, tapping into employees’ networks—a form of social capital—facilitates access to top talent. In talent management, promoting social capital helps to create an inclusive environment where individuals feel valued and purposeful, which is crucial for retaining talent. Likewise, social interactions and informal networks are vital for knowledge-sharing and organizational learning.
How HR can foster social capital in the workplace
1. Build strong relationships
At its core, social capital is all about relationships — nurturing those that exist and building new ones.
Stronger relationships have various benefits. When people get along better, they can work more efficiently, be more creative, and work together more cohesively. Open communication and collaboration lines help to establish a culture of trust and mutual respect.
For HR teams, building stronger relationships involves creating opportunities and platforms that facilitate connections among employees.
- Establish formal and informal communication channels that are incorporated as a way of work
- Train employees on effective communication and active listening
- Create consistency in collaboration tools used for work
- Provide opportunities for employees to connect.
How HR can foster its own social capital
- Build trust and credibility: HR professionals need to build their own trust and credibility to increase their social capital with others in the organization. This is done by openly sharing policies, decisions, and processes. It also involves demonstrating transparency, consistency, and fairness in their application.
- Acting on employee feedback: Listen to what employees have to say and do something with their suggestions or worries. Feedback mechanisms could include employee suggestion programs, regular surveys, or open-door policies.
- Implement DEIB practices: Lastly, it is essential to incorporate diversity and inclusion practices into HR strategies. Feeling included and being accepted for who you are strengthens social bonds and builds trust among colleagues. This not only helps to build trust in HR but also to increase social capital within the organization.
Example: Relationship-building at Salesforce
Salesforce, a cloud-based software company, is an excellent example of how an organization can prioritize relationship building. The company has an Ohana culture that emphasizes inclusivity, trust, and collaboration. This culture encourages employees to support one another professionally and personally, fostering solid social connections and mutual respect. Furthermore, the company also promotes social capital through initiatives such as employee resource groups (ERGs) and volunteer programs. Such initiatives provide opportunities for employees to connect, share experiences, and give back to their communities.
2. Promote employee engagement
Strong social ties are a crucial driver of employee engagement. HR should play a role in creating an environment where employees are not just passively fulfilling a role but actively participating and contributing in meaningful ways. But also in developing a culture where people feel respected, trusted, and part of the team.
When done well, employees feel more connected to their work and each other, leading to increased organizational social capital.
Boosting job satisfaction and morale is also key to building social capital in the workplace. Employees who are happy and fulfilled in their roles tend to form strong bonds with their colleagues and work together more effectively. High morale creates a sense of loyalty and commitment among employees. Happy employees are also more likely to participate in team activities and go the extra mile. This helps strengthen relationships and trust and ultimately builds strong organizational social capital.
- Create performance management systems that recognize and reward employee achievements
- Implement onboarding programs for swift integration and a sense of belonging among new hires
- Establish Employee Resource Groups or affinity networks for employees. These groups help employees to connect, share experiences, and foster a sense of community.
How HR can foster its own social capital
Promoting employee engagement is also crucial to increase the social capital HR holds with others within the organization.
- Make work meaningful: Listen to employees, support their career growth, and make their work meaningful. By doing so, HR improves the work experience and strengthens their own relationships with employees.
Engaged employees are more likely to trust HR and their colleagues, work well with others, and help create a positive work culture – which is key to the company’s success.
Example: Zappos unique organizational culture fosters social capital
Zappos, an online shoe and clothing retailer, strongly emphasizes building social capital through its unique organizational culture. The company prioritizes employee relationships and engagement by fostering a sense of community and belonging. Zappos produced an annual “Culture Book” where employees contributed personal stories and insights about the company culture. Additionally, Zappos offers cultural immersion programs for new hires to integrate them into the organization’s values and practices.
3. Drive innovation and creativity
Social capital acts as a catalyst for creativity and the sharing of new and innovative ideas. It builds a foundation for strong, collaborative networks where individuals feel more comfortable and inspired to share their insights and breakthroughs within the team or organization — leading to more diverse perspectives and experiences.
These diverse perspectives can result in a richer pool of ideas, helping to challenge conventional thinking and explore innovative solutions. This enriches both HR’s and the organization’s social capital. When everyone feels welcome and valued, no matter their background, they’re more likely to share their ideas. Likewise, a culture where everyone is open and works together leads to more creativity and new ways of thinking.
- Implement diversity training workshops, affinity groups, and inclusive recruitment strategies
- Ensure recruitment and hiring practices attract a diverse pool of candidates
- Establish training and development programs focused on diversity awareness and cultural competence
- Implement systems that actively seek out and value employee ideas and suggestions
- Encourage teamwork across departments and host problem-solving workshops and team-building activities
- Introduce work policies that allow employees the freedom to work when and where they feel most creative and productive. This could include flexible hours, remote work options, or customized workspaces.
How HR can foster its own social capital
- Enhance HR’s own social capital: When HR works hard to create a place where new ideas are welcome, it improves relationships and teamwork across the organization. It also significantly enhances HR’s own social capital.
- Value employee contributions: By demonstrating a commitment to and trust in employees’ abilities and ideas, HR signals that it respects and values employee contributions. This, in turn, helps to enhance HR’s reputation and influence within the organization.
- Build external social capital: Creating a place that values new ideas and creativity not only boosts HR’s image within the company but also helps to build external social capital. Innovative and creative cultures help attract top talent and enhance the organization’s reputation as a forward-thinking and dynamic workplace. This good reputation helps HR find more talented people and build stronger connections, making it even more successful both inside and outside the company.
Example: Google values innovation and collaboration
Google is known for its strong emphasis on fostering social capital in the workplace through various initiatives to drive innovation and collaboration. One notable example is its “20% time” policy, which allows employees to spend a portion of their workweek pursuing projects outside their core responsibilities. This policy encourages employee collaboration, creativity, and knowledge sharing, leading to innovations such as Gmail and Google Maps.
4. Support organizational resilience
Social capital becomes a vital resource for organizations during change and crises. Strong connections can be a source of support, information, and resources.
The COVID pandemic showed just how crucial HR is in using social capital to keep things running smoothly. During this time, HR professionals across the globe served as the central point of contact for communication and coordination to ensure everyone knew what was going on and that work continued safely.
By tapping into the organization’s existing relationships, trust, and networks, social capital can help promote organizational resilience and drive successful change.
- Provide consistent, transparent communication and genuine engagement. This helps to build credibility and trust.
- Actively listen to employees’ feedback, address their concerns, and involve them in the change process. This helps to foster a sense of ownership and commitment.
- Offer development opportunities that enable employees to handle new challenges and technologies
- Encourage Community Engagement and Corporate Social Responsibility (CSR)
- Promote Health and Wellbeing Programs and Employee Assistance Programs (EAPs) that address the holistic needs of employees.
- Facilitate internal mobility to retain valuable talent and knowledge even in the face of change
- Use the influence of well-respected team leaders and members to get others on board.
How HR can foster its own social capital
Supporting organizational resilience enhances the social capital HR has within an organization. HR becomes a key source of stability, flexibility, and ongoing operation during changes or challenging times. Clear and direct communication, along with policies and practices that look after employees’ wellbeing, builds trust. This shows employees they are supported and valued.
When HR proactively contributes to building resilience, it not only aids the organization in navigating challenges but also strengthens the relationships, trust, and collaboration essential for social capital. Engaging employees in the change process, addressing their concerns, and providing the necessary training and resources reinforce HR’s role as a trusted advisor and change agent.
Example: Patagonia prioritized employee health and safety
Known for its commitment to sustainability and employee wellbeing, Patagonia lived up to its reputation during the pandemic by prioritizing the health and safety of its employees. The company quickly adapted its operations, implementing safety measures in its warehouses and maintaining full pay and benefits for all employees, even those unable to work due to store closures. This level of support reinforced the trust and loyalty between Patagonia and its employees, crucial elements of the company’s strong organizational capital.
How HR professionals can develop their own interpersonal skills
Developing interpersonal skills is not just advantageous but essential for those in HR, too. These skills help HR professionals navigate the complexities of the current work environment, spur innovation, and manage the balance between daily tasks and the overarching strategic objectives.
In the AIHR T-shaped HR Competency Model, the Execution Excellence competency is centered on creating meaningful connections and encouraging teamwork to achieve goals efficiently. A key strategy that HR can employ to achieve this is through cultivating social capital.
Final words
Social capital is crucial for organizational and HR success. It sets the foundation for creating an innovative, engaged, and resilient workforce. HR plays a critical role in building an environment rich in social capital, which helps organizations harness the collective potential of their human capital.
In the digital future of work, it will not be our digital skills that will make us successful. Our ability to connect as human beings, leveraging social capital and authentically connecting with each other will be what makes the difference.
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