The post-pandemic shift to hybrid work has highlighted the need for new leadership approaches to effectively manage geographically dispersed teams. Balancing professional responsibilities with family obligations requires leaders to extend their support beyond traditional workplace boundaries to maintain employee engagement. In the banking sector, the role of leadership in overseeing remote work is particularly critical, as managers must attend to employees’ physical and mental well-being to ensure smooth operational performance. This study examines benevolent leadership—a leadership style characterized by holistic care extending beyond work tasks—and its effect on employee engagement through the mechanism of psychological empowerment, grounded in social exchange theory. Using a cross-sectional design, data were collected from 280 banking employees in Malaysia. Results indicate that psychological empowerment mediates the relationship between benevolent leadership and employee engagement. The study highlights the essential role of empowerment in enabling benevolent leaders to foster engagement in a hybrid, multicultural banking context. Recommendations include enhancing leadership practices in engagement programs and strategic task delegation to effectively boost employee involvement in the banking sector.
