Amid a 24.3% increase in employee turnover in Indonesia’s distribution and manufacturing sectors, this study aims to examine how transformational and transactional leadership influence intention to quit through supervisory coaching and work engagement. By integrating motivational and developmental mechanisms, the study provides a more comprehensive understanding of employee retention and contributes to SDG 8 by highlighting the role of leadership and coaching in enhancing the quality of work and workforce stability.
Data were collected from 639 employees nested within 177 supervisor–subordinate groups across 35 companies. Using multilevel analysis using Mplus 8.3, this study examines cross-level leadership effects on intention to quit through the mediating roles of supervisory coaching and work engagement.
The findings reveal complementary pathways through which leadership influences employee retention. Transformational leadership reduces intention to quit both directly and indirectly through work engagement (partial mediation), whereas transactional leadership operates solely through work engagement (full mediation). Additionally, supervisory coaching partially mediates the relationship between both leadership styles and work engagement, highlighting the interplay between motivational and developmental processes.
The findings highlight the strategic role of leadership development and coaching-based HRD practices in fostering employee engagement and retention. By strengthening supervisory coaching capabilities, organizations can enhance the quality of work, promote sustained employee commitment and contribute to achieving SDG 8 through more productive, resilient work environments.
This study integrates the Job Demands–Resources theory and adult development theory to conceptualize leadership as both a motivational and developmental resource. Its multilevel mediation approach offers novel insights into how leadership behaviors shape employee engagement and retention within industrial organizations in emerging economies.
