Transformational leadership and talent retention in indian it organizations

Employee retention is a strategic concern in knowledge-intensive information technology (IT) organizations because the loss of skilled employees can disrupt organizational knowledge, project continuity, team cohesion and innovation. This study examines the relationship between transformational leadership and talent retention among IT employees in Coimbatore District, Tamil Nadu, India, with employee engagement examined as an explanatory mechanism. Drawing on transformational leadership theory and Social Exchange Theory, transformational leadership is represented by idealized influence, inspirational motivation, intellectual stimulation and individualized consideration. A quantitative, cross-sectional survey design was used with 379 valid responses obtained from IT employees through stratified sampling. Descriptive statistics, Pearson correlation, multiple regression, covariance-based structural equation modelling and Hayes PROCESS analyses were used. Transformational leadership was perceived moderately positively (M = 3.5008, SD = 0.54965), while talent retention was also relatively favourable (M = 3.5482, SD = 0.68869). Transformational leadership was significantly correlated with talent retention (r = .606, p < .001), and the full regression model explained 63.3% of the variance in talent retention (R² = .633; F = 91.296, p < .001). Intellectual stimulation (β = .204, p < .001) and individualized consideration (β = .144, p = .017) were significant positive unique predictors. Employee engagement significantly mediated the leadership–retention relationship: the bootstrapped indirect effect was .581, 95% CI (.452, .715), and approximately 77% of the total effect operated through engagement. In contrast, the interaction between leadership and engagement was not significant (b = .0368, p = .466), indicating no moderation. The findings suggest that IT organizations should develop leaders who stimulate employee thinking, provide individualized developmental support and deliberately cultivate engagement. Importantly, the article treats intention to stay as one component of the broader talent-retention construct rather than incorrectly equating the two.