Why Is Teamwork Important in the Workplace?

Collaboration is becoming increasingly important for today's work.

Over half the employees responding to a 2020 survey said that their jobs are reliant on collaboration, global design firm Gensler said.

Why do people value teamwork and collaboration so highly? Because they deliver tangible results like higher profits and better employee well-being. We'll discuss exactly how successful teamwork can transform organizations and get you started toward improving teamwork in your organization.

What Is Teamwork?

We often think about teams as groups of coworkers gathered in a conference room to put together a project. But as employees work together in more sophisticated ways, we need to expand our understanding of teamwork to match.

"Teamwork today is more about initiating the right pattern of collaboration inside and outside of groups that need to get work done," said Rob Cross, Senior Vice President of Research for the Institute for Corporate Productivity (i4cp). "In many ways our conventional notion of teamwork—requiring consistent mission, vision and purpose—is too difficult for leaders to implement today."

"People are on too many teams," Cross continued. "They are coming in and out of teams at a far more rapid pace than ever before. And in many cases the teams have grown too large for this more conventional approach to teams."

Today's teams are often separated by time and space, working remotely and using digital tools to collaborate on projects. These same tools can facilitate teamwork between coworkers who have never met, and only know each other through the footprints they leave in shared documents or project folders.

Managers who use these tools well in their organizations can reap the benefits of teamwork.

8 Benefits of Teamwork

Researchers studying workplace collaboration have identified multiple benefits for organizations that use teamwork well.

1. Teams Produce Better Work

In a 2006 study published by the American Psychological Association (APA), researchers assigned coding challenges to individuals and variously sized groups. Groups of three, four and five people delivered better performance on the challenges than individuals or groups of two. But even average groups of two performed on par with the best individuals.

Lead author Patrick Laughlin, Ph.D., offered several explanations for why the larger groups did so well:

• The groups were better at generating and adopting good answers to the problems.
• Team members could check the group's work and more reliably reject bad answers.
• The teams were able to process complex information more effectively than individuals.

When employees deliver better work, their organizations thrive. Managers should identify more difficult tasks in their organizations and assign them to teams. Shorter group meetings or open Slack channels can also replicate some of the methods for team success in Laughlin's study.

2. Teams Finish Complex Projects Faster

A 2021 article published in Proceedings of the National Academy of Sciences (PNAS) discussed how groups approach complex tasks. Researchers found that teams completed complex tasks a minute-and-a-half faster than individuals for tasks that took about 10 minutes total. More importantly, teams were more efficient—they completed more work per person-hour.

Time is money for businesses, so using teamwork is critical to improving organizational efficiency.

However, the researchers also found that individuals were faster than teams on simple tasks. Good managers must break up workloads accordingly. Use teams for projects with more work and more connections between to-do items. Let people work on their own for smaller items.

3. Diverse Teams Produce More Creative Solutions

Diverse teams include members of varied gender, sex, race, ethnicity, sexual orientation and economic backgrounds. These factors help team members understand the world differently, which can lead them to novel ideas.

According to Adina Sterling, a professor at the Columbia Business School, groups from more diverse backgrounds outperform more homogeneous teams in both innovation and creativity. The same goes for individuals who only have one perspective.

"Diversity fosters innovation and creativity through a greater variety of problem-solving approaches, perspectives, and ideas," says a report from McKinsey and Company. The report also points out that diversity in leadership teams creates more welcoming workplaces, where team members feel better about putting forth unorthodox ideas.

Implementing diverse teams can lead directly to financial benefits for companies. McKinsey and Company found that more diverse companies were 35 percent more likely to deliver superior financial performance than their less diverse counterparts.

4. Teamwork Helps Employees Grow

Teams don't just benefit companies through better, faster and more creative work. Teamwork also helps team members grow as professionals.

"Most people cite times in their careers that were most stimulating and engaging—times when they were highly energized, productive and learning—as experiences within teams," Cross told Newsweek.

Employees working in teams have better access to mentorship and peers who can check their work and make recommendations for improvement. Engagement employees internalize feedback from team members, improving their skills and becoming better mentors in turn.

"People obtain a tremendous array of benefits from teams including learning new skills, being energized in their work and cultivating connections that tie them to their organizations," Cross concluded.

5. Teamwork Improves Employee Well-Being

Published work in the journal Group & Organizational Management, researchers studying healthcare employees found that teamwork contributed to better well-being. That, in turn, improved patient satisfaction.

Organizations should take these results seriously. Research from the University of Oxford's Saïd Business School found that happy workers are 13 percent more productive. This connection is well-established, with other research from the University of Warwick finding a 12 percent increase in productivity.

The bottom line is that teams make employees feel better and let businesses experience the benefits of employee well-being.

6. Teamwork Sooths Burnout

Burnout is an occupational phenomenon plaguing workplaces worldwide. According to research from McKinsey and Company, 28 percent of U.S. employees experienced burnout symptoms in 2022. Those include exhaustion, feelings of negativity about one's job and reduced effectiveness at work.

A lack of teamwork in the workplace may contribute to burnout, in addition to other causes like micro-stress. "[S]ocial connectedness is a basic human need that when lost leads to burnout," write Drs. Steven and Fredrick Southwick of the Yale University School of Medicine and University of Florida College of Medicine.

Teams offer employees social connectedness in the workplace. Managers can use this to help workers stay engaged and avoid burnout.

7. Teamwork Motivates Individuals

Managers have complained for years that 'nobody wants to work,' and conditions aren't improving. Employee engagement in the U.S. recently fell for the first time in a decade, according to January 2022 research from Gallup. Even worse, active disengagement is on the rise—up to 16 percent in 2021.

Employees who don't feel invested in their companies are less productive. Their disengagement can impact other areas of company performance, like customer satisfaction and business growth.

Fortunately, teamwork may offer a solution to poor engagement.

"Quite often the quality of the interactions in a highly functioning team can make even mundane work feel purposeful," Cross said. "People obtain a tremendous array of benefits from these teams including learning new skills, being energized in their work and cultivating connections that tie them to their organizations."

8. Teamwork Builds Communication

Teams build a common understanding over time. The more they work together, the more they understand each other's strengths and weaknesses.

Over time, this collaboration builds soft skills like interpersonal communication, active listening and empathy, helping employees grow professionally. Better communication in the workplace can increase productivity by 25 percent, McKinsey and Company states.

Managers should run team-building activities to build communication and trust among their direct reports.

The Bottom Line for Workplace Collaboration

Managers who implement teams well can dramatically improve their company and their staff. However, some researchers have expressed concerns that teamwork can put additional stress on employees.

"[T]he performance gains of teamwork practices may actually come at the cost of increased job demands and job-related anxiety," writes Chidiebere Ogbonnaya, a professor at the Kent Business School in an article for the Human Resources Management Journal.

Fortunately, leaders can change how they implement teamwork to earn its benefits without putting more pressure on workers. "Successful leaders in our work are more precise in cultivating specific kinds of collaboration—depending on the phase of the work—that allows their teams to produce without creating an excessive collaborative demand on all," Cross said.

Ready to implement exceptional teams in your office? Read more about creating high-performing teams.