Retaining employees in an organization has become a growing challenge for most corporations in current modernized world. Ironically, the turnover among employees is prevalent within the well-educated and highly skilled employee group. Retaining optimistic staff with excellent job performance is important for the growth of the organization as turnover of critical employee is deemed as major hindrance to the development of the organisation in relations to cost of replacement and work disruption. In this competitive world, retaining admirable workers is essential because losing them can disrupt an organization’s competitive advantage, lowering the morale of other staff, as well as reducing productivity and work quality. Lack of social support of the supervisor is a major reason for employees leaving an organisation. Having engaged employees results in greater profitability, shareholder returns, productivity and customer satisfaction. Transformational leaders are motivating leaders who initiate their subordinates by empowering the identification of the group members with each other and with the organization, and by instilling hope, trust, optimism, and positive emotions. The absence of positive support and motivation from their superiors contribute to employees’ decision to willingly leave their jobs. This paper tries to explore a possible factor that can give significant impact to employee retention in an organization. Based on the literature review, studies conducted on different fields of industries, revealed that there is existence of a positive relationship between leadership style and employee engagement. Thus, the objective of this study is to investigate the implication of transformational and transactional leadership styles on employee engagement to foster employee retention.