Abstract:
Background: Sri Lanka’s IT sector faces growing challenges in retaining
skilled employees due to intense competition and global job
opportunities. Employer branding has become an important strategy for
attracting and retaining talent, while employee engagement plays a key
role in strengthening this relationship. However, limited research has
examined these factors together in the Sri Lankan IT context.
Objective: This study aims to examine the impact of employer branding
on talent retention among the IT sector employees in Sri Lanka. It
further analyzes the mediating role of employee engagement in this
relationship, drawing on the principles of Social Exchange Theory
(SET).
Methodology: A quantitative research design with a deductive approach
was employed. Data were collected through a structured questionnaire,
and 203 usable responses were obtained from IT professionals in Sri
Lanka, using convenience sampling. Convenience sampling was selected
because it allowed efficient, flexibility and timely access to a large number
of readily available IT professionals in Sri Lanka within the study’s
resource and time constraints.
Key Findings: The results of the regression analysis revealed that
employer branding has a significant positive influence on talent retention
(β = 0.46, p < 0.001). The model explained 42% of the variance in talent
retention (R² = 0.42). Further, the mediation analysis indicated that
employee engagement partially mediates the relationship between
employer branding and talent retention. The indirect effect was
significant (β = 0.18, 95% CI [0.09, 0.29], p < 0.01), confirming partial
mediation.
Conclusion/Implication: The findings demonstrate that effectively communicated employer brand value elements enhance employee
engagement, which subsequently improves retention in Sri Lanka’s IT
sector. In practice, the study underscores the need to align brand
promises with concrete initiatives such as career development,
recognition systems, and work-life balance programs, ensuring that
employer branding translates into sustained commitment. The results
also highlight the importance of strengthening relational and emotional
connections between employees, team leaders, and senior management,
offering practical guidance for managers and HR practitioners to foster
long- term loyalty and retention.
