Digital Talent Strategies for Employee Retention: Mediation Analysis of Organizational Trust and Employee Engagement in the Context of Sustainable Development in Manufacturing Industries

Abstract

This study aims to analyze the impact of digital talent on employee retention, mediated by organizational trust and employee engagement in manufacturing companies in Indonesia. In the era of Industry 4.0, digital talent has become a critical asset for manufacturing companies in navigating digital transformation. This study employs a quantitative approach with a sample of 170 employees from manufacturing companies in the industrial area of West Java. Data were collected through an online questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that digital talent has a positive and significant impact on employee retention, both directly and through the mediation of organizational trust and employee engagement. These findings underscore the importance of developing employees' digital competencies as an effective retention strategy. Organizational trust plays a crucial role in mediating the relationship between digital talent and employee retention, suggesting that investing in digital skill development also fosters trust in the organization's commitment. Employee engagement also emerges as a significant mediator, indicating that employees with strong digital skills tend to be more engaged in their work. The managerial implications of this study highlight the importance of a holistic strategy in managing digital talent, which includes skill development programs, creating a work environment that supports digital innovation, and reinforcing a transparent and adaptive organizational culture. By integrating digital talent development, enhancing organizational trust, and boosting employee engagement, manufacturing companies can improve employee retention and maintain a competitive edge in the face of digital era challenges