The effect of transformational leadership climate on employee engagement during digital transformation in Indonesian banking industry

Abstract

The industrial era 4.0 requires companies to radically conduct changes related to technology. This is so that the company can follow the market's everchanging appetite and is essential to maintaining the company's sustainability. The digital transformation that occurs is fundamental, changing existing procedures and arrangements and creating a new business ecosystem. In carrying out a company transformation, it requires full support and commitment from workers. And the process needs to be conducted by competent leaders, in line with the spirit of change. In this study, the relationship between transformational leadership climate and employee engagement was measured. The research was conducted on banking service companies that have made radical changes related to technology for 2 years. The results showed that the climate created by leaders who adopt transformational leadership styles has a positive and significant effect on employee engagement. This research is a preliminary study, and has limitations, including the number of samples and types of companies studied.