Transformational leadership is key to talent retention

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 the customers because of loss of productivity and insufficient production capacity.

The Global Talent Competitiveness Index (2020) ranks South Africa at 106 out of 132 positions in its ability to retain talent. South African businesses that wish to enhance their competitiveness, must make talent retention a key priority. Leadership plays a very important role in this regard, as the leadership behaviours and types of values promoted by leaders impact on the talent retention of an organisation.

In a collaborative multi-disciplinary study conducted by Nelson Mandela University researchers amongst over 700 South African respondents representing various employment sectors; a positive, significant correlation between certain leadership behaviours and talent retention was found.

Transformational leaders bring talent to life

The study found that many employees’ experiences fell short of their expectations, which could suggest that whilst employers may have talent retention strategies in place, they are not aligning their actions with these strategies. This holds negative implications for the organisations, as staff turnover is likely to increase.

Leadership behaviours associated with the transformational leadership style were noted in the study to be relevant in retaining talented employees. In examining the specific leadership behaviours that employees considered to be important in contributing to increasing talent retention, it was not surprising to note that engagement and empowerment behaviours were found to be highly rated in driving talent retention.

These leadership behaviours are aligned to leaders’ good practices in creating a positive psychosocial environment for employees. It is, therefore, important that organisations implement strategies to build leaders who can demonstrate the behaviours sought by their followers, as this is important in enhancing the retention of top talent.

Way forward for an engaged talent pool

The study demonstrated that employees who have leaders who (1) provide them with a sense of belonging, respect, empowerment and engagement, (2) provide support for their personal growth and development and (3) grant them flexibility and freedom in executing their duties are effective in driving a talent retention strategy. These transformational leaders influence their employees in a positive way, and they are less likely to be enticed away by another organisation. Leaders need to connect at the human interface with their employees. In a technology-driven world, this is particularly important and more so at a time when the workplace has experienced, and will continue to experience, a move to remote work.

For HR managers and practitioners, the results of this study point to the importance of a good talent management strategy. The retention of skilled and engaged employees requires leaders to behave in a manner that effectively drives high performance in an ever-changing environment. One way of ensuring this, is for leaders to use appropriate assessment tools to diagnose their leadership behaviours to determine whether they promote the behaviours that promote 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 versus these expectations. This profile should not be regarded as a static measure and 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 use of diagnostic tools could form part of an effective talent management strategy in assisting leadership to develop the behavioural skills that drive talent retention. 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 a positive, empowering and engaging work experience for employees. These leadership behaviours, when supported by an enabling culture, are central to effective talent management practices and a critical element in building and retaining a strong talent pipeline.

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

Click here to view full study.

Useful resources:
Nelson Mandela University Business School
The Business School presents formal and non-formal programmes which are aimed at providing managers with a vigorous and thorough grounding in the fundamental elements of business administration, management and leadership.
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