Leadership in IT, employees’ motivation and retention.

Sammanfattning: Employee turnover and retention is a major concern in the IT industry. Being a growing sector, the importance of minimizing turnover and understanding employee’s motivation towards retention cannot be ignored by leadership. This study was created to investigate the effect of different leadership styles on employee motivation and retention within the IT industry. Authors tried to understand whether transactional or transformational leadership style would encourage motivation and retention.The data for this study was collected through an online survey based on 63 closed-ended questions on demographics, leadership style, motivation and retention. This survey was distributed to IT employees in different parts of Europe. A sample of 129 responses was gathered. This data was afterwards analysed using the Statistical Package for Social Sciences (SPSS).The results obtained in this study confirm that transformational leadership positively influences employees’ retention, not only directly but also indirectly, through employee’s intrinsic motivation, which would be in line with previous studies and literature. Such a positive influence was not found, though, for transactional leadership style, which, according to the results, does not have a major influence on employees’ motivation and not at all on retention.