Digital HRM in Action: How AI Shapes Workforce Skills and Drives Organizational Adaptability

Abstract

With the digital transformation era, artificial intelligence (AI) is transforming human resource management (HRM) to make it predictive, data-driven, and personalized in its workforce practices. This work explores the role of AI-enabled HRM (AI-HRM) in increasing the adaptability of an organization based on the situations of Pakistani organizations. Based on the Dynamic Capabilities Theory, the study explores the direct impact of AI-HRM on adaptability in an organization, the mediating role played by the growth of employee skills, and the moderating effect through the support of the organizations to AI. A medium to large-scale quantitative survey of 238 employees who are using AI-based HR practices was conducted. Findings show that AI-HRM generates a lot of organizational flexibility and growth of employees. The relationship between AI-HRM and adaptability is partially mediated by employee skills development, whereas the support of AI by an organization enhances the effects of AI-HRM on skill development. These data point to the fact that the successful combination of AI technologies and skill formation programs, along with the positive organizational culture, is the key to creating a strong, flexible, and responsive workforce. The research adds to the literature by locating AI-HRM as a micro-foundation of dynamic capabilities and provides practical implications to organizations that want to achieve sustainable competitive advantage using digital HR practices.