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Virtual teams are characterized by short social exchanges and a lack of para-verbal and non-verbal communication. This poses several challenges to virtual leaders. This study aims to decode the role of leadership and understand its impact on engaging geographically dispersed teams. This research offers a comprehensive view of idealized influence and inspirational motivation – the two sub-factors of transformational leadership which defines the charisma of a leader in leveraging engagement of virtual employees. It also studies the impact of effective leadership communication and trust between team members in engaging employees working in virtual teams.

This research is a mixed method study. Phase I of qualitative study (10 FGD) facilitated phase II of quantitative study. A questionnaire was developed to reflect themes that emerged from qualitative phase. The focus of the qualitative study was to understand the role of leaders viewed by virtual employees in the context of engagement. A cross-sectional data of 300 respondents from eight different industries was gathered using a survey questionnaire. Purposive non-probability sampling technique was used. Data were analyzed using partial least squares structural equation modelling, SmartPLS 3 software.

Results showed that leaders play a significant role in engaging virtual employees. The transformational leadership behaviour with a purview of idealized influence and inspirational motivation positively engages employees in virtual teams. The findings emphasize that trust between team members impacts engagement, and trust mediates the relationship between leadership communication effectiveness and engagement of virtual employees.

Positive leadership behaviour such as transformational leadership helps create an environment of trust and engagement that is experienced by a team working distantly. Leader plays a critical role to foster an engaging environment that boosts the potential of every employee. Organizations invest a lot of money, time and resources in leadership and communication training. This study could help organizations in training their managers/leaders for adapting their leadership style that suits the virtual work environment. Organizations can also pay attention to the required skill sets of people while hiring and/or promoting leaders who have to lead virtual employees.

The exponential increase in virtual working has necessitated decoding essential leadership skills to engage the virtual workforce. Working virtually is psychologically a different experience and hence requires a separate study. The lack of proximity and face-to-face conversations in virtual teams increases the complexity of leading and thus alters the engagement equation. This paper explores the impact of leaders in enhancing employee engagement and that is presented in a condensed manner.