why is collaboration important
Training & Learning

Why Workplace Collaboration is the Secret Sauce to Higher Retention and Better Business Outcomes

Without collaboration, we may never have flown in airplanes or understood the structure of the DNA molecule. Without collaboration, we may never have experienced the joyful music of The Beatles or savored the creamy richness of Ben & Jerry’s ice cream. Each of these creations is the result of collaboration between people who shared ideas and expertise to produce outstanding results. Collaboration is what makes us human.

Workplace collaboration counterintuitively took center stage during the pandemic, as separated teams scrambled to find ways to work closer, despite their physical distance. One survey reported a 27% increase in collaboration across different company levels. Gartner reported a 44% increase in the use of collaboration tools in a two-year period since 2019.

Collaboration is the key to a more transparent, productive, and happier workplace. When employees collaborate by sharing ideas and skills, they feel connected with each other, are more engaged, and contribute to a culture of innovation and growth. This has a proven impact on employee retention and organizational success.

In this article, we dig deeper into the benefits of collaboration and, in particular, explore the links with higher retention and stronger business impact. Interested in how to put collaboration at the heart of your L&D programs? Check out our ebook all about Collaborative Learning:

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Workplace collaboration: The employee benefit

Collaboration in the workplace has far-reaching positive effects on employees because it strengthens connections, communication, and learning.

Collaboration reduces isolation

Collaboration literally brings people from different backgrounds and different skills together, whether in a synchronous or asynchronous setting. It isn't just effective for getting things done—it’s a powerful way to combat loneliness. Especially during the pandemic, when loneliness is rampant, and togetherness is at a premium.

Before the pandemic, most collaborative activities took place in person. But it was a challenge to collaborate amid a sudden shift to virtual. During the year and half of work from home, loneliness and isolation consistently showed up as the most conspicuous problem: Employees felt a loss of connection with peers, interacting with an immediate few team members while more distant relationships fell off the radar. Companies became more siloed. This had a negative impact on employee engagement and happiness at work.

Team collaboration is an antidote to this loneliness. In fact, even unstructured collaboration like virtual coworking, where you simply work in each other’s presence, and open office hours, where you can chat with managers without a set agenda, reduces social isolation. Structured, purposeful collaboration takes the benefit further. It makes people feel connected with each other and gives them a sense of belonging to a team as they work toward common goals. This leads to a happier, more engaged workforce and improved retention.

Chart showing different generations' attitudes towards workplace collaboration

Employees felt a loss of connection with peers, interacting with an immediate few team members while more distant relationships fell off the radar.

Collaboration improves communication

Collaboration by nature is built on the idea of communicating effectively with each other. More collaboration can carve out and refine communication pathways as team members work together to accomplish common goals.

People tend to think of collaboration and communication as the same idea, but they are not. Communicating with a coworker doesn’t necessarily mean you’re collaborating. But to collaborate successfully, communication is critical. A lack of communication results in siloed information, misinterpretation, and disengaged employees, which negatively impacts job satisfaction and retention.

Collaboration leads to better communication because employees share ideas and diverse perspectives to move forward as a team. It creates a sense of psychological safety that opens more doors to communication as employees feel valued and engaged.

Collaboration helps employees solve problems

Collaboration enables employees to become thought partners. This means they pool their ideas and expertise to come up with the best solutions to problems. Each individual brings new information that can trigger thought processes and conversations toward a solution.

Through collaboration, teams gather diverse inputs and solve problems faster in a routine workflow. It creates an open-minded environment that encourages employees to experiment with different ideas that are out of their comfort zone. This stretches their problem-solving skills and makes them more productive and creative when faced with challenges.

But there’s a risk here — sometimes, teams develop a tendency to get fixated on identifying problems and not solving them. They lose sight of the bigger picture. This dampens productivity and team morale. The solution to this problem lies in celebrating small wins and assuring employees it’s okay to make mistakes.

The solution to this problem lies in celebrating small wins and assuring employees it’s okay to make mistakes.

Collaboration prevents burnout

A heavy workload with constant pressure to deliver can cause employee burnout, which hurts their well-being and productivity. Collaboration eases this pressure on one individual by making arduous tasks a team effort.

With effective collaboration, work becomes a group effort, and credit, as well as failure, is shared. The process of working with other humans increases empathy and creates respect for others’ contributions. It also helps employees feel confident and supported, which in turn boosts productivity.

However, excessive collaboration in the form of too many meetings and too little free time can actually lead to burnout. Collaboration needs to enable, not impede, productivity. The key is to reinstate a balance between synchronous and asynchronous collaboration so employees enjoy the benefits of collaboration but aren’t wasting their time in endless meetings.

Related: Quiz: Assess Your Burnout Risk—and Learn How to Avoid the Employee "Turnover Tsunami"

Collaboration facilitates knowledge-sharing

Collaboration enables employees to access information in their flow of work simply by asking a colleague or participating in a discussion. It allows coworkers to share their expertise and help others get unstuck when faced with a challenge.

Employees spend 5.3 hours waiting for information to do their jobs. A team member may have handled a process before or solved a problem at an earlier company. This ready solution could prove useful in helping a coworker solve a similar problem at your company. Without collaboration, this institutional knowledge would remain in the team member’s head, or worse, cause a brain drain if the employee leaves.

Collaboration facilitates the sharing of valuable knowledge, helping to reduce frustration and improve productivity. This keeps employees engaged and leads to higher job satisfaction, making them want to stay at the company.

Chart showing what different generations value in workplace

Related: What is Collaborative Learning?

Collaboration gives employees a sense of ownership

Collaboration promotes a sense of ownership because each employee feels responsible for a part of the puzzle. It gives them a sense of purpose when they perform their work while making them feel like they are part of a bigger team goal.

However, we’ve all been in meetings where there is much discussion and brainstorming but little clarity in roles and responsibilities. Collaboration leads to ownership only when clear expectations are set for each task, and individual responsibility is assigned.

Employees seek this kind of ownership and devote more of themselves to work when they feel their contributions are meaningful. It motivates them to remain at a job longer because a sense of ownership satisfies basic psychological needs related to identity and belonging.

Workplace collaboration: The organizational impact

Successful collaboration leads to higher productivity, better alignment, and continued growth while also serving as a buffer in times of crisis.

Collaboration aligns distributed and remote teams

A remote and distributed workforce is here to stay as a post-pandemic reality. Even if some workers return to the office, they’re bound to have teammates who’ve opted to work remotely or are in different countries. Collaboration will be key to transcending geographical boundaries and time zones and to align remote teams.

Collaborating in person is easy—there’s frequent in-person contact, instant communication, and quick problem-solving. Decisions can be made at a fast pace and in real-time. But with the abrupt shift to remote work, collaboration needs to be worked into daily interactions to keep remote employees aligned.

Collaborative exercises like course creation, virtual whiteboards, project rooms, coworking spaces, and social hangouts can get remote teams up to speed, giving them the same agility and maintaining organizational progress.

Collaboration leads to better alignment with business objectives

Collaboration helps teams align their efforts and goals to serve the larger business objectives. Especially in a crisis, workplace collaboration allows people to use their diverse experiences to identify risks and opportunities and generate new solutions for group projects.

Without strategic alignment at the team level, employees may end up working in silos and be disconnected from the needs of the business. This leads to a loss of productivity and a waste of time and effort.

By collaborating, teams can become high-performing, which means they also tend to become more strategic. Collaborative teams are 39% more likely to require prework from participants and 55% more likely to begin meetings with a check-in that updates coworkers on their progress. This helps keep a laser focus on company-wide goals.

Collaboration drives innovation and growth

Collaboration in the workplace creates deeper engagement with tasks, leading to continuous innovation and growth. In a collaborative setup, thinking critically and asking questions is a natural part of the process. It gives employees the opportunity to develop, test, and implement new ideas.

In addition, when prototypes and new innovations are tested by a group rather than an individual, it leads to improved processes and better outcomes. This is because innovative ideas are collectively and continually vetted by employees, not just at a yearly review.

Collaboration helps organizations tide over crises

In hard times, a collaborative environment plays an even more significant role in bringing employees together. Just as people evolve during a crisis, so do their work strategies and willingness to network with others.

During the 2007-08 financial crisis, the most collaborative partners outperformed their colleagues. More recently, during the pandemic, 51% of respondents in a survey said they were able to maintain productivity on collaborative tasks.

Collaboration helps people deal with uncertainty and stress during tough times, keeping them focused on coming out stronger. This keeps the most collaborative companies afloat during crises.

Collaboration strengthens company culture

Collaboration doesn’t mean complete harmony. In fact, it’s the constructive friction of ideas, resources, and skillsets that results in a stronger company culture.

69% of employees don’t believe the cultural goals set by leaders. Many companies use collaboration as a buzzword to describe their culture, but the actual operations are at odds with the idea. For example, when coworkers are forced to compete against each other instead of focusing on their personal growth and the progress of the company, collaboration holds little meaning.

Done well, collaboration can truly revolutionize company culture and offer a competitive advantage. This may also be a key to attracting new talent, as satisfied employees are more likely to contribute to your company's referral program.

Find the right balance between synchronous and asynchronous collaboration

Organizations everywhere want to be seen as collaborative and rake in the benefits, but if there’s too much emphasis on synchronous collaboration in the form of meetings and live workshops, it leaves employees with little time to do their work and hinders productivity. Instead, maximize the benefits by finding the right balance between synchronous and asynchronous collaboration—you can learn how, here.