The Role of Leadership in Influencing Employee Retention

MX Bites / July 13, 2023

The bulk of employee engagement and retention lies in the strength of leadership. It’s becoming clearer to organizations, in today’s fast-paced world, that employees want more than high pay or recognition given to them based on their performance. While that is good, they also desire to experience quality leadership which creates a positive culture that drives employee satisfaction and retention. Asides from a number of others, one of the main roles of leadership in shaping employee retention is giving role clarity to employees. 

Without clear expectations or role clarity, employees may become tense, causing friction in their performance. Research shows that 84% of employees with high role clarity have intentions to continue with the organization and the overall performance of an employee with high role clarity increases by 25%. Therefore, when leaders take up the responsibility to curb role ambiguity, they improve employee experience and retention. The rest of this article aims to provide more insights into the role of leadership in shaping employee retention.

What is Employee Retention?

Employee retention is referred to as the ability of an organization to retain its employees or prevent employee turnover. It is also the strategy put forth by an employer to retain top talents and ensure their sustainability. 

One of the most critical problems facing any organization and its management is employee retention. IT companies invest a lot of time and money each year in hiring and training new employees to stay up with the market’s demands. Therefore, employee retention is important in helping businesses to grow in productivity and profitability. 

Raising outstanding talent takes a lot of time and resources, and their departure is usually a huge loss for the firm. Hence, when strategies are employed to retain employees, it propels the organization as there’s no cause to draw back by investing in training new employees and waiting for them to adapt to the principle of the organization. 

How Leadership Influences Employee Retention

The role of leadership in influencing employee retention is very critical to the success of an organization, and it can be achieved through the following:

1. Setting up structure and providing clarity

It is the responsibility of leaders to set up a workable and clear structure for employees to function effectively. Employees feel appreciated, engaged, and driven to the organization’s goal when leaders foster a pleasant and supportive work culture. Employers are to provide strategies for employee retention by offering clear guidance, creating attainable goals, and communicating effectively with employees. As iterated above, leaders are to clearly relay their expectations to their employees; it helps to increase their productivity and measure their performance.

2. Managing Talents

A lot of employees are made to take up roles and responsibilities in areas where they still struggle, thereby reducing their rate of efficiency and performance. If this persists longer than supposed, an employee may lose confidence and satisfaction in his role and may opt to resign. Therefore, employers should strategically assign roles to employees based on their strengths and area of expertise, to boost their efficiency and increase their satisfaction.  

3. Building Trust and Dependability

Trust is vital for every successful working relationship. Employers must build an atmosphere where employees feel safe to explore and learn from their mistakes without prior condemnation. Employees who trust their leaders are more likely to feel confident in their jobs, communicate their thoughts and concerns openly, and stay dedicated to the company. Trust, when combined with efficient communication, creates a sense of psychological safety, which leads to higher employee retention.

4. Promoting Work-life Balance and Well-being

Leaders should deal with employees like every other human being with a life outside of work and the organization. They should endeavour to connect emotionally with their employees and encourage them to create a healthy balance between their work and personal life. When leaders encourage self-care, offer flexibility, and promote a positive work-life balance, employees are more likely to stay with the organization. 

5. Fostering Growth and Development

Employees are encouraged to stay longer in an organization where they are constantly challenged to grow. It gives them a sense of fulfilment and accomplishment, as their choice to stay in an organization for a long time does not cause stagnation in their career. Therefore, leaders should invest time and resources into coaching, mentoring, and providing training opportunities to employees for learning and skill enhancement. By empowering employees and helping them progress in their careers, leaders show that they care about their team members’ professional growth. 


Leadership plays an undeniably significant role in employee retention. Today’s business leaders must understand that, more than high Pay, employees are more drawn to stay in an organization where they are challenged to grow, and their personal interests are prioritized. Therefore, by implementing the strategies outlined above, leaders can create a positive work environment where employees are engaged, motivated, and encouraged to stay longer with the company.


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