When Workplace Friendships Outweigh a Pay Raise
At first glance, a job offering 10 percent above market salary should clearly outshine one paying 10 percent below. However, a recent KPMG survey challenges this assumption by introducing the variable of workplace friendships. When respondents were presented with a choice between a lower-paying role enriched by close workplace friendships and a higher-paying role devoid of such social connections, 57 percent favored the former.
This finding highlights the significant value employees place on human connection at work. Though the study’s hypothetical nature means no one accepted real offers or experienced the realities of sustaining promised friendships, it nevertheless underscores an important truth: relationships profoundly shape how people evaluate jobs.
Understanding KPMG’s Survey Parameters
The KPMG Friends at Work 2.0 survey was conducted online between June 17 and 30, 2025, with 1,019 full-time U.S. professionals. Participants worked in office-based roles requiring specific skills or higher education within organizations employing at least 100 people. The sample spanned a diverse range of industries and job levels from entry to senior vice president, excluding C-suite executives.
KPMG crafted employer profiles varying five attributes: salary, workplace friendship, work-life balance, learning opportunities, and company culture. Each attribute had three levels — low, medium, and high. For friendship, levels ranged from no meaningful connections to close workplace relationships. Salary levels were set at 10 percent below market, market rate, and 10 percent above.
The baseline profile had all attributes at their mid-level, establishing a 50 percent preference benchmark. When modeling a scenario with close workplace friendships but a salary 10 percent below market — with other factors held average — preference increased to 57 percent. Conversely, a profile with a salary 10 percent above market but lacking close friendships was less favored.
The Hypothetical Nature and Its Implications
KPMG interprets this as employees valuing workplace friendship highly enough to offset a 20 percent salary difference (from 90% to 110% of market rate). However, it is crucial to distinguish between hypothetical preferences and real-life decisions. Respondents did not weigh associated costs such as commuting, childcare, or contract security, nor did they face the practical challenge of living on a lower salary.
Hypothetical trade-offs illuminate priorities by isolating specific attributes but simplify the complexity of actual job choices. For example, selecting friendship in a survey does not capture the impact of a 10 percent pay cut on household finances. Thus, the survey reveals that close workplace relationships can shift job preference significantly but stops short of proving that people will routinely sacrifice substantial pay for friendship.
Why Workplace Friendships Matter Economically
While salary compensates for time worked, the social quality of that time is equally important. Trusted colleagues can ease the burden of challenging projects, provide informal insights absent from formal communications, and transform routine workdays into supportive experiences.
KPMG’s broader data supports this perspective: 87 percent of respondents rated having close work friends as very important, and 28 percent cited increased productivity and motivation as key benefits of such relationships. Although these are self-reported perceptions rather than independently measured outcomes, they demonstrate that employees view workplace friendships as integral to their job experience, not merely a social bonus.
Interestingly, financial constraints also affect the ability to nurture these friendships outside work. The 2025 survey found that 75 percent of respondents felt their finances or the broader economy limited social interactions with colleagues, up notably from 54 percent in 2024. This underlines that even the “non-financial” aspects of work carry monetary considerations when friendship requires time and resources.
Friendship Cannot Be Contracted Like Salary
There is a fundamental difference between salary, which an employer can guarantee through contracts, and friendship, which develops organically between individuals. A recent University of Kansas study suggests that close friendships require over 200 hours of voluntarily chosen time together. While work is a key venue for meeting potential friends, mandatory time spent together is less predictive of closeness than freely chosen interactions.
This distinction cautions against interpreting KPMG’s 57 percent preference as a guarantee of friendship. “Close workplace relationships” were presented as a fixed attribute in the survey’s employer profiles, but in reality, they are dynamic outcomes dependent on employees’ voluntary engagement over time.
Employers can foster conditions conducive to friendship by allowing informal conversations, avoiding overly rigid schedules, and keeping social interactions voluntary. Conversely, mandating socialization or treating friendship as a performance metric risks undermining genuine connection.
Insight from Related Research on Workplace Friendships
Silicon Canals has previously examined Gallup’s “best friend at work” engagement question, which has stirred debate among executives for its personal tone. Gallup found that softening “best friend” to “friend” reduces the question’s ability to identify highly productive teams. Though Gallup’s focus is on engagement outcomes and KPMG’s on employer preference, both highlight the critical distinction between mere collegiality and true closeness.
A workplace can be professional, supportive, and polite without providing the depth of relationship where employees feel fully understood and comfortable seeking help without lengthy explanations.
Complexities in Retention — Findings from KPMG’s 2026 Follow-Up
KPMG’s 2026 Friends at Work study adds nuance to the narrative. While employees with close personal friends at work were the most engaged, they were paradoxically the most likely to be actively seeking new jobs — 42 percent anticipated job-searching within the next year.
The 2026 study used different samples and more granular relationship categories, separating close personal friends from workplace friends and collegial contacts. These findings challenge simplistic managerial assumptions that friendships inherently promote retention. Instead, friendships may empower employees with confidence, information, and networks that facilitate mobility — and sometimes the friend may leave the job first.
Why the Friendship Premium Should Not Become a Pay Discount
One cynical interpretation of the 57 percent preference might be that employers can pay less if they foster a socially warm environment. However, KPMG’s data contradicts this. Work-life balance was the strongest factor driving job preference, with profiles combining excellent work-life balance and learning opportunities reaching 71 percent preference.
Respondents evaluated holistic bundles of job attributes, not dismissing compensation. Additionally, the survey did not explore the long-term consequences of sustained below-market pay, such as diminished pension contributions or growing resentment.
Employers should value workplace friendships without treating them as a substitute for fair pay. Compensation addresses one dimension of employment, while trust, autonomy, time, and connection address others. These elements complement rather than replace each other.
Moreover, fostering close workplace friendships raises inclusivity concerns. Strong social circles can inadvertently exclude newcomers, contractors, remote workers, or those outside dominant groups, potentially limiting access to information and advocacy. A friendship-friendly culture is not synonymous with an inclusive one.
Beyond Salary: Recognizing the Full Employment Experience
KPMG’s publicly available data does not provide enough granularity to apply the 57 percent preference universally across professions, countries, or work types. The sample was American, full-time, office-based, and drawn from organizations with at least 100 employees during a specific labor market window in mid-2025.
Nonetheless, the survey’s value lies in illuminating an often-overlooked aspect of job choice. Employment is not experienced as a mere payslip at an empty desk; it encompasses interactions with managers, trusted colleagues, daily challenges, moments of recognition, and informal support.
For 57 percent of respondents, human connection outweighed a significant salary difference, emphasizing the inadequacy of a salary-only model in capturing what workers truly value.
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