Transformational leadership is essential to talent retention: Study

Research by Nelson Mandela University Business School provides valuable insight into how organisations can retain skilled and engaged employees

An organisation's leaders should play an active role in guiding, supporting and empowering employees.
An organisation's leaders should play an active role in guiding, supporting and empowering employees.
Image: Supplied/Nelson Mandela University Business School

Retaining high-performing talent is a critical business imperative.

While a degree of organisational turnover is inevitable, there are costs linked to the departure of a high-calibre employee.

These include the costs associated with finding temporary or replacement staff, reduced morale as employees work overtime, failure to satisfy customers because of loss of productivity and insufficient production capacity.

Local businesses that want to enhance their competitiveness must therefore make talent retention a priority. A collaborative, multidisciplinary study conducted by Nelson Mandela University Business School provides valuable insight into how this can be achieved.

Fast fact

SA ranked 106th out of the 132 countries featured in the 2020 Global Talent Competitiveness Index.

After surveying 700 respondents representing various employment sectors in SA, the researchers from Nelson Mandela University Business School found that many employees’ work experiences fell short of their expectations. 

This suggests that while organisations may have talent retention strategies in place, they are not aligning their actions with these strategies. The negative implication of this is that staff turnover is likely to increase.

Another finding was a strong positive correlation between certain leadership behaviours and talent retention.

Transformational leaders bring talent to life

Researchers found that employees were less likely to be enticed away by other organisations if they had transformational leaders whose behaviours helped to create a positive psychosocial work environment. 

Such behaviours included:

  • Providing employees with a sense of belonging, respect, empowerment and engagement;
  • Providing support for employees’ personal growth and development; and 
  • Granting employees flexibility and freedom in executing their duties.

This points to the need for leaders to connect with employees at the human interface. This is particularly important in a technology-driven world, and more so at a time when the workplace has experienced, and will continue to experience, a move to remote work.

Way forward for an engaged talent pool

Organisations should implement strategies to build leaders who behave in a manner that effectively drives high performance in an ever-changing environment. 

For human resource managers and practitioners, this could mean introducing appropriate tools to enable leaders to assess their behaviours to determine whether they are in line with those that promote talent retention.

Furthermore, organisations could develop an organisation-specific profile of the current leadership behaviour skill set sought by their employees through seeking the input of these employees. 

This profile could then be used, as in the context of this study, as a measure against which employees rate their current experiences vs their expectations. 

This profile should not be regarded as a static measure. Rather it should be amended over time as employee needs and expectations evolve in response to an ever-changing workplace. 

Enabling culture to grow a strong talent pipeline

The key takeaways from this study are that, to build and maintain a strong talent pipeline, an organisation’s leaders should play an active role in guiding, supporting and empowering employees and designing an effective career management system. 

Human resource management should provide interventions to train and develop leadership in the behaviours that promote talent retention and, in so doing, contribute to creating a positive, empowering and engaging work experience for employees.

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This article is an adaptation of peer-reviewed research first published in the SA Journal of Human Resource Management.

This article was paid for by Nelson Mandela University Business School .