Examining the effect of AI-driven human resource management on digital transformation: The mediating role of technological capability and the moderating role of organizational agility

The present study will assess how AI-based human resource management can influence digital transformation. It also examines the mediating factor of technological capability in this relationship and whether organizational agility reinforces the impact of AI-driven human resource management on digital transformation. This paper used quantitative research design, a cross-sectional survey of employees and leaders working in organizations that implement digital transformation initiatives. Data analysis was conducted using partial least squares structural equation modeling to test the direct, mediating, and moderating relationships among the study's constructs. The proposed framework evaluated the effects of AI-based human resource management practices on digital transformation, with technological capability as a mediator and organizational agility as a moderator. The results suggest that human resource management through AI has a positive, significant impact on digital transformation. The findings further reveal that technological capability partially mediates this relationship, meaning that organizations with stronger technological capabilities are better positioned to turn AI-based human resource practices into digital transformation outcomes. Moreover, the relationship is moderated to a considerable extent by organizational agility, indicating that the beneficial impact of AI-based human resource management on digital transformation increases with organizational agility. The results are informative to managers and decision-makers aiming to improve the outcomes of digital transformation through human resource innovation. To maximize transformation performance, organizations need to invest in AI-based human resource management systems, increase technological capacity, and develop organizational agility. The findings can assist companies in developing more flexible and technology-intensive HR policies that can underpin sustainable digital transformation. The research fills the current gap in the literature on AI-based human resource management and digital transformation by providing a novel conceptual framework that integrates the processes of mediation and moderation. It builds on existing knowledge by demonstrating that technological capability can explain the relationship between AI-based human resource management and digital transformation, and that organizational agility determines the strength of that relationship.