The ability to retain and engage employees is now, more than ever, a major strategic issue for organizations in the context of a pandemic paired with a persistent labor shortage. To this end, teleworking is among the work organization conditions that merit consideration. The purpose of this cross-sectional study is to examine the direct and indirect effects of teleworking on work engagement and intention to quit, as well as the potential moderating effect of organizational and individual characteristics on the relationship between teleworking, work engagement, and intention to quit during the COVID-19 pandemic, based on a sample of 254 Canadian employees from 18 small and medium organizations. To address these objectives, path analyses were conducted. Overall, we found that teleworking, use of emotion, skill utilization, and recognition appear to be key considerations for organizations that wish to increase work engagement and decrease intention to quit, in the context of a pandemic paired with a labor shortage. Our results extend the literature by revealing the pathways through which teleworking, use of emotion, skill utilization, and recognition are linked to work engagement and intention to quit, and by suggesting specific interventions and formation plans that are needed.