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ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
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Linking Digital Transformation and Sustainable HRM: A Conceptual
Framework on the Mediating Role of Digital Competencies
Siti Murni Mat Khairi
1
, Nurfaznim Shuib
2
, Shazwani Mohd Salleh
3
, Roozita Maskun
4
and Nor Azri
Sharizal Abu Bakar
5
1-3
Faculty of Business and Management, Universiti Teknologi MARA Cawangan Kedah, Kampus Sungai
Petani, 08400 Merbok, Kedah, Malaysia
4
Graduate School of Business, SEGI University & Colleges, 47810 Petaling Jaya, Selangor Darul Ehsan,
Malaysia
5
Ceer Motors, Prince Saud Ibn Abdullah Jalawi, 13535 Riyadh, Saudi Arabia
DOI:
https://dx.doi.org/10.47772/IJRISS.2025.910000484
Received: 14 October 2025; Accepted: 21 October 2025; Published: 17 November 2025
ABSTRACT
The accelerating pace of digital transformation is fundamentally revolutionizing organizational structures and
practices, yet its connection to sustainable Human Resource Management (SHRM) remains unclear. Although
many organizations invest heavily in digital technologies, they often struggle to align these innovations with
sustainability goals because of uneven digital competencies among employees and leaders. To address this gap,
this study proposes a conceptual framework that positions digital competencies such as technological
proficiency, digital literacy, cybersecurity, and AI skills as the critical mediators between digital transformation
and SHRM. Using a narrative review methodology, the authors reviewed Scopus-indexed literature published
between 2019 and 2025 across the fields of HRM, sustainability, and digital innovation, drawing on the
Resource-Based View and Dynamic Capabilities Theory. The findings suggest that digital transformation alone
cannot drive sustainable HR outcomes; rather, its effectiveness depends on the strategic development of digital
competencies at both individual and organizational levels. Specifically, these competencies enable practices such
as green recruitment, eco-efficient performance management, and inclusive digital cultures. In the absence of
such capabilities, organizations risk underutilizing the sustainability potential of their digital investments.
Theoretically, this framework advances SHRM research by integrating digitalization into the sustainability
agenda. Practically, it provides HR leaders with an actionable roadmap to prioritize digital upskilling as a means
to unlock sustainable value from technology. The study concludes by calling for empirical validation of the
proposed model and further investigation into contextual factors, including industry type, organizational size,
and national culture, that may shape its implementation. Ultimately, this study lays the groundwork for HR
systems that are not only digitally advanced but also environmentally responsible and socially equitable in the
era of Industry 5.0, which is a concept denoting human-centric and sustainable technological integration.
Keywords: Digital transformation, Digital competencies, Sustainable human resource management (SHRM),
Conceptual framework, Sustainability
INTRODUCTION
In today’s volatile, technology-driven business environment, organizations face mounting pressure to reconcile
digital innovation with sustainability imperatives. Digital transformation was defined as the strategic integration
of digital technologies across all organizational functions, and is no longer optional but a core driver of
competitiveness and resilience (Hornungová & Petrová, 2025; Sharma & Kohli, 2023). Simultaneously,
sustainable Human Resource Management (HRM) has emerged as a critical lever for embedding environmental,
social, and governance (ESG) principles into talent practices (Andestari et al., 2024). Yet, the mechanism through
which digital transformation translates into sustainable HRM outcomes remains conceptually underdeveloped.
This paper addresses this nexus by proposing a novel conceptual framework that positions digital competencies,
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
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such as technological proficiency, digital literacy, cybersecurity, and AI skills (Cardoso & Gomes, 2025), as key
enablers required to effectively leverage digital tools in connecting digital transformation to sustainable HRM.
It is increasingly recognized in the literature that digital transformation reshapes HRM beyond automation,
influencing recruitment, learning, performance management, and employee engagement (Zhang & Chen, 2024).
When aligned with sustainability goals, such digital HRM practices can foster green behaviors, inclusive
cultures, and long-term value creation (Singh et al., 2025; Lou et al., 2024). However, this alignment is not
automatic, and it depends on the organization’s capacity to cultivate digital competencies at individual and
systemic levels. Without such competencies, digital investments could lead to inefficiencies, ethical dilemmas,
or even digital stress that undermines well-being and sustainability (Gupta et al., 2025). Thus, while prior studies
acknowledge the potential synergy between digitalization and sustainability in HRM, they often treat these
domains in isolation or assume a direct causal link without specifying the mediating processes.
This oversight constitutes a significant theoretical and practical problem. Despite growing scholarly interest in
both digital HRM and sustainable HRM, there is still a lack of integrative models that explain how digital
transformation empowers sustainability-oriented HR practices (Poulose et al., 2024). Organizations struggle to
design HR strategies that simultaneously harness digital potential and advance ESG objectives, leading to
fragmented initiatives and suboptimal outcomes (Mijatović et al., 2020). The absence of a coherent framework
hinders both scholarly progress and managerial action, particularly in contexts where digital maturity and
sustainability literacy are still evolving.
To address this gap, this paper proposes a conceptual framework that highlights the mediating role of digital
competencies in the relationship between digital transformation and sustainable HRM. In line with the recent
calls for process-oriented theorizing in HRM (Poulose et al., 2024; Singh et al., 2025), the proposed conceptual
framework goes beyond correlation to articulate a causal pathway whereby digital transformation fosters
organizational and employee-level digital competencies, which in turn enable the design and implementation of
HRM practices that promote environmental stewardship, social equity, and economic resilience. By synthesizing
empirical insights from Scopus-indexed studies on digital HRM, green talent management, and sustainable
innovation, this paper offers a structured, theoretically informed model to guide future research and practice.
The significance of this work lies in its dual contribution. Theoretically, it advances the field by integrating the
Resource-Based View (Barney, 2001) as applied in digital contexts by Alexandro (2025), and Dynamic
Capabilities Theory (Teece, 2007 & Sun et al., 2024) to explain how digital competencies function as strategic
reconfigurable resources. Practically, it equips HR leaders with a roadmap to align digital investments with
sustainability goals, thereby enhancing organizational legitimacy and long-term performance (Adisa et al.,
2024). The remainder of this paper is structured as follows: Section 2 reviews the literature on digital
transformation and sustainable HRM; Section 3 presents the proposed conceptual framework; Section 4 outlines
methodological considerations for future validation; Section 5 discusses theoretical and managerial implications;
and Section 6 concludes with limitations and avenues for future research.
LITERATURE REVIEW
Digital transformation is increasingly recognized not merely as a technological shift but as a strategic enabler of
sustainability in human resource management. Recent scholarship underscores that for digital transformation to
meaningfully contribute to sustainable HRM, it must be deliberately aligned with ESG objectives from the outset
(Hornungová & Petrová, 2025). Central to the alignment between digital transformation and sustainable HRM
are digital competencies, which encompass the cognitive, technical, and behavioral capabilities that enable HR
professionals and employees to leverage digital tools for sustainable organizational outcomes.
Digital transformation for sustainable HRM
Digital transformation serves as a catalyst for sustainable human resource management (HRM) by embedding
advanced technologies such as artificial intelligence (AI), big data analytics, and cloud computing into HR
processes. Through HR digitalization, organizations are able to optimize recruitment, performance management,
and employee development while aligning these processes with sustainability objectives (Andestari et al., 2024;
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Vărzaru, 2022). This transformation extends beyond automation to encompass the redesign of HR strategies that
promote efficiency, transparency, and social responsibility. For instance, the integration of digital tools in HR
functions enhances workforce analytics and evidence-based decision-making, enabling organizations to address
sustainability challenges such as resource optimization and equitable employment practices (Fenech et al., 2019;
Cumba et al., 2024). Therefore, digital transformation acts as both an operational and strategic enabler,
positioning HRM as a driver of organizational sustainability.
The successful implementation of HR digitalization, however, depends on the development of relevant digital
competencies among HR professionals. These competencies include technological proficiency, data analytics
literacy, and digital ethics, which together empower HR practitioners to leverage digital systems effectively and
responsibly (Cardoso & Gomes, 2025; Al-Tayyar, 2025). Digital competencies also facilitate the integration of
green HRM practices by allowing professionals to monitor environmental performance, manage sustainable
training initiatives, and cultivate an organizational culture supportive of digital innovation and sustainability (Ali
et al., 2025; Singh et al., 2025). Consequently, HR professionals who possess strong digital capabilities are better
equipped to align human capital strategies with environmental, social, and governance (ESG) objectives, thereby
contributing to long-term organizational resilience and competitiveness (Zhang et al., 2024; Sultanova et al.,
2024). In this way, digital competencies serve as the bridge between technological transformation and sustainable
HR outcomes.
Ultimately, the convergence of digital transformation and digital competencies produces measurable
sustainability outcomes at both organizational and societal levels. When HR digitalization is underpinned by
competent digital leaders and a sustainability-oriented workforce, organizations can achieve greater operational
efficiency, reduced environmental impact, and enhanced employee well-being (Honglei et al., 2025; Singh et al.,
2025). Advanced digital systems, such as Human Resource Information Systems (HRIS) and AI-powered
analytics, allow firms to implement performance management systems that are more flexible, inclusive, and
environmentally conscious (Zournatzidou et al., 2024; Sharma & Kohli, 2023). Moreover, digital transformation
supports the creation of learning organizations that prioritize continuous upskilling, innovation, and sustainable
value creation (Sharma & Kohli, 2023; de Pablos et al., 2025). Therefore, when digitalization and competency
development are strategically integrated within HRM, they collectively advance sustainability goals—enhancing
organizational agility, promoting ethical management, and reinforcing the long-term sustainability of both
business and society.
Table 1: Summary of digital transformation for sustainable HRM
Author(s) &
Year
Article Title
Key Findings
Andestari et al.
(2024)
Sustainable HR Management in the
Digital Era: A Conceptual Framework
Highlights how digitalization enhances HR
efficiency, transparency, and ethical practices.
Fenech et al.
(2019)
The Changing Role of HRM in an Era
of Digital Transformation
HR shifts from administrative to strategic
functions through technology adoption.
Ali et al. (2025)
AI-Driven Capabilities and
Organizational Sustainability
AI use in HR processes improves
environmental and operational performance
via digital literacy.
Cardoso &
Gomes (2025)
Advancing Digital Competencies in
Public Administration
Digital literacy and upskilling improve
efficiency and service delivery.
Singh et al.
(2025)
Creating Sustainable Workplaces in the
Digital Circular Economy
Emphasizes integrating digital innovation
into HR for sustainable work environments.
Zournatzidou et
al. (2024)
Digital Transformation and Sustainable
HRM: Eco-Friendly Business
Continuity
Digital HR systems enhance performance
management and reduce environmental
footprint.
Zhang et al.
(2024)
Developing a Competency Model for
HR Directors in Digital Transformation
HR directors need digital agility, data
analytics, and sustainability-oriented
leadership.
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Sultanova et al.
(2024)
Quality Management through
Sustainable HRM Based on Digital
Competencies
Strong correlation between digital skills and
HRM quality improvements.
de Pablos et al.
(2025)
Insights into Digital Business, HRM,
and Competitiveness
Digital innovation in HR drives
competitiveness and long-term sustainability.
Across the reviewed studies, digital transformation consistently emerges as a strategic enabler of sustainable
HRM, promoting efficiency, ethical management, and long-term environmental responsibility. Scholars
emphasize that digital competencies, including AI proficiency, data analytics, and digital literacy, are
fundamental for HR professionals to lead sustainability transitions effectively. Furthermore, the literature
highlights a growing shift from purely technology-driven transformation toward a human-centric sustainability
approach, stressing continuous learning, adaptability, and ethical leadership as essential pillars of sustainable
HRM.
Digital competencies for sustainable HRM
Technological proficiency is a crucial digital competency that enables HR professionals to navigate the
complexities of digital transformation in sustainable HRM. It is increasingly observable that proficiency in
artificial intelligence (AI)-based tools and automation systems optimizes recruitment, training, and performance
management while enhancing efficiency and transparency in HR processes (Singh et al., 2025; Al-Tayyar, 2025).
Expertise in big data analytics and cloud computing provides HR professionals with advanced decision-making
capabilities, helping organizations monitor sustainability outcomes and implement workforce strategies
(Cardoso & Gomes, 2025). These competencies form the technical foundation in embedding sustainability
within HR functions, which allows organizations to respond strategically to digital disruptions while achieving
eco-friendly business objectives.
Beyond technical expertise, digital literacy is indispensable for HR professionals to fully leverage technological
innovations for sustainable HRM. Foundational digital literacy skills allow HR practitioners to effectively
navigate digital tools, while advanced literacy skills, such as cybersecurity and AI application knowledge, ensure
organizational data protection and strategic integration of technology (Muzam, 2023; Ali et al., 2025). Equally
vital is adaptability in change management, which enables HR leaders to guide organizations through
technological shifts while aligning HR practices with broader sustainability goals (Lukita et al., 2024; Zhang et
al., 2024). These competencies ensure that HR professionals can manage complex challenges, encourage
employee engagement, and balance technological advancement with human-centric sustainability practices.
In rapidly changing organizations, HR directors are further expected to embody roles as strategic partners and
change agents who embed sustainability into digital HR architecture (Zhang et al., 2024). Thus, digital
competencies function as the critical mediating mechanism through which raw technological potential is
converted into purposeful, sustainability-oriented HR practices. Digital HR systems, which are powered by AI,
cloud platforms, and people analytics, streamline recruitment, performance management, and learning in ways
that promote inclusion, reduce carbon footprints through approaches such as virtual onboarding, and foster
employee well-being (Sposato et al., 2025; Arora et al., 2024).
For instance, Espina-Romero et al. (2024) found that SMEs with high digital competency maturity reported
stronger organizational cultures centered on sustainability, as digital tools enabled transparent communication,
real-time feedback, and data-driven ESG reporting. Similarly, Andestari et al. (2024) argue that digital
transformation reshapes HR strategy by enabling dynamic talent development aligned with circular economy
principles. However, this positive impact depends on the organization’s capacity to cultivate the requisite human
capabilities, and in their absence, technology remains underutilized or misaligned with sustainability goals.
Despite these opportunities, the integration of digital competencies into sustainable HRM faces significant
barriers. These include managerial skill gaps, limited access to digital resources, and insufficient institutional
support for upskilling (Mykhailovska et al., 2025). Moreover, ethical risks such as algorithmic bias in hiring
algorithms, data privacy violations, and digital-induced stress pose serious challenges to the “sustainable”
promise of digital HRM (Sani & Mandina, 2024; Arora et al., 2024). Addressing these issues requires more than
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technical fixes, and it demands a human-centric approach in which digital competencies encompass ethical
reasoning, fairness, and environmental consciousness (Boopathi & Gopi, 2024).
Although sustainable HRM has gained traction as a strategic approach that balances organizational performance
with employee well-being and social responsibility, the mechanisms through which digital transformation
supports its realization remain underexplored. Previous studies have examined digital transformation primarily
from a technological or strategic management perspective, but limited research has integrated digital
competencies as a mediating factor in achieving sustainable HRM outcomes. This creates a theoretical and
practical gap in understanding how organizations can leverage digital transformation effectively to empower
sustainable HRM practices. Consequently, there is a pressing need to develop a conceptual framework that
explains the dynamic relationship between digital transformation, digital competencies, and sustainable HRM.
Such a framework can provide theoretical insights into the integration of digital and human factors while offering
practical guidance for HR practitioners and policymakers to establish and foster resilient organizations for a
promising future.
Table 2: Summary of digital competencies for sustainable HRM
Competency
Domain
Key Elements
References
Technological
Proficiency
Mastery of AI, automation
tools, big data analytics, and
cloud computing.
Cardoso & Gomes
(2025); Singh et al.
(2025); Ali et al.
(2025)
Digital Literacy
Development of basic and
advanced digital skills,
including cybersecurity and
digital communication.
Muzam (2023); Ali et
al. (2025)
Sustainability-
Oriented Digital
Skills
Integration of green HRM
practices, sustainability
innovation, and environmental
management training.
Kushnareva et al.
(2023); Sultanova et
al. (2024); Singh et
al. (2025)
Change
Management and
Adaptability
Flexibility in managing digital
transformation, redesigning
HR workflows, and supporting
workforce transitions.
Lukita et al. (2024);
Zhang et al. (2024);
Interpersonal and
Emotional
Intelligence Skills
Effective communication,
collaboration, empathy, and
critical thinking in digital
contexts.
Muzam (2023);
Zournatzidou et al.
(2024)
Research Gap
Although digital transformation has become a key focus in sustainable HRM research, existing studies often
overemphasize technology while neglecting the human-centric aspects of sustainability. Many scholars highlight
the benefits of digital tools such as AI, automation, and big data analytics for improving efficiency and
performance. However, fewer studies address how these technologies can also support employee well-being,
ethical practices, and long-term social sustainability. This imbalance creates a theoretical gap where digital
transformation is viewed mainly as a technological process, rather than as a human-driven change that integrates
social, environmental, and moral considerations into HRM practices.
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Furthermore, current frameworks on digital competencies tend to focus on technical and analytical skills, while
paying limited attention to sustainability-related capabilities such as ethical decision-making, inclusivity, and
adaptability. Research in this area also remains fragmented, often drawing from separate theories in HRM,
sustainability, and digital transformation without integrating them into a unified framework. As a result, there is
a lack of understanding of how digital competencies can function as strategic enablers of both technological
advancement and sustainable human resource practices.
METHODOLOGY
Research Design: Narrative Review Methodology
This study adopts a narrative review methodology to develop a theoretically grounded conceptual framework
that explains the mediating role of digital competencies in the relationship between digital transformation and
sustainable Human Resource Management (SHRM). Unlike systematic reviews that prioritize statistical
aggregation, narrative reviews are particularly well-suited for synthesizing complex, emerging, and
interdisciplinary phenomena where theoretical integration is needed more than empirical meta-analysis
(Greenhalgh et al., 2022). Given that the intersection of digital transformation, digital competencies, and SHRM
is still in its conceptual infancy and that insights remain fragmented across HRM, information systems, and
sustainability literature, a narrative approach allows for critical interpretation, thematic synthesis, and the
construction of a coherent explanatory model (Snyder, 2019). This design enables the authors to identify
underlying mechanisms, reconcile contradictory findings, and propose a novel theoretical pathway that can guide
future empirical inquiry.
The narrative review method is selected instead of the systematic review method because it provides greater
flexibility and is more suitable for addressing complex, interdisciplinary topics that involve conceptual linkages
rather than strictly empirical relationships. While systematic reviews are recognized for their rigor, objectivity,
and replicability, they are primarily designed to address narrowly defined research questions through pre-
specified inclusion criteria and often focus on quantitative evidence synthesis (Lefaivre & Slobogean, 2013;
Garritty et al., 2019). In contrast, the present study seeks to develop a conceptual framework by synthesizing
diverse sources, including conceptual papers and theoretical discussions. Consequently, the narrative synthesis
approach aligns more closely with the exploratory nature of this research.
Although systematic reviews provide precise and replicable results, they are often constrained by their narrow
scope, which makes them less suitable for topics that require a broad exploration and theoretical integration
(Cook, 2019; Melendez-Torres et al., 2017). In addition, systematic reviews demand extensive quality appraisal
and frequently exclude studies that do not meet strict methodological standards, thereby overlooking critical
theoretical or contextual insights (Melendez-Torres et al., 2018). Given that the field of digital transformation in
HRM is still evolving and its conceptual boundaries are continuously expanding, such restrictions may hinder a
comprehensive understanding of the topic. Therefore, a narrative approach allows for greater conceptual
flexibility and inclusivity. In contrast to systematic reviews, narrative synthesis allows for the inclusion of diverse
forms of evidence, including qualitative insights, theoretical reflections, and conceptual arguments (Pittman,
2023; Skelly et al., 2019). This flexibility supports the integration of complex constructs such as digital
competencies, sustainability, and HRM practices, each of which involves contextual variability and
multidimensional interactions.
Key Steps in Conducting the Narrative Review
The narrative review process involves three key steps, namely: planning, data collection, and thematic synthesis.
During the planning stage, the research scope was defined to focus on studies connecting digital transformation
with sustainable HRM outcomes. For data collection, the Scopus database was selected due to its extensive
coverage of high-impact peer-reviewed journals across business, management, and social sciences. The review
strategy emphasizes inclusivity, by incorporating articles that encompass conceptual, empirical, and theoretical
research. Finally, the collected literature was reviewed using an integrative thematic approach, which facilitated
the identification of recurring patterns, key concepts, and theoretical underpinnings that informed the
development of the proposed conceptual framework (Snyder, 2019).
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The selection process for this literature review followed a transparent and systematic approach to ensure the
inclusion of high-quality and relevant studies. A total of 48 journal articles were carefully selected through an
extensive search conducted exclusively using the Scopus AI database, which is recognized for its comprehensive
and peer-reviewed academic coverage. To maintain the relevance and currency of the findings, the time frame
was limited to studies published between 2019 and 2025, reflecting the period when digital transformation,
digital competencies and sustainable HRM gained significant scholarly and practical attention, particularly in
response to global technological and environmental changes. Following the identification of potential sources, a
rigorous screening process was applied to include only studies that directly addressed the intersection of digital
transformation, digital competencies and sustainability within HRM, while excluding irrelevant or non-empirical
papers.
Figure 1: Narrative Review Process
Data Collection and Review Strategy
Data collection was conducted through the Scopus database using a carefully constructed search string: “digital
transformation” or “digital change” or “digital shift” or “technology adoption”; AND “sustainable” or “eco-
friendly” or “green” or “environmental”; AND “human resource” or “HR” or “workforce” or “personnel”; AND
“management” or “administration” or “oversight” or “governance”; AND “employee engagement” or “talent
management” or performance” or “development”; AND “organizational change” or “business strategy” or
“innovation” or “process improvement”. This search string ensures comprehensive coverage of relevant
literature while filtering out unrelated studies. Articles were screened based on relevance, publication quality,
and conceptual alignment with the study’s objectives. The final selection included peer-reviewed journal articles
published between 2013 and 2024, ensuring both foundational and contemporary perspectives. To synthesize
findings, an integrative thematic analysis approach was employed, which enabled the clustering of themes
around digital transformation, digital competencies, and sustainable HRM (Thomas & Harden, 2008).
Key Findings from the Narrative Review
The narrative review reveals that digital transformation alone is insufficient to drive sustainable HRM; its impact
is fully realized only when mediated by well-developed digital competencies across the organization. These
competencies, which are technological proficiency, digital literacy, cybersecurity, and AI skills act as the
operational bridge that transforms digital infrastructure into sustainability-oriented HR practices such as green
talent acquisition, eco-efficient performance systems, and inclusive digital cultures. However, this pathway is
fraught with challenges, including skill gaps, resource inequities, and ethical dilemmas related to AI bias and
data privacy. Critically, the literature confirms that organizations that strategically invest in building digital
competencies while embedding sustainability into their digital HR architecture achieve superior outcomes in
innovation, employee well-being, and environmental regulations. These synthesized insights directly inform the
proposed conceptual framework by positioning digital competencies as the central mediating variable that
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explains how digital transformation empowers sustainable HRM, thereby addressing a significant theoretical
gap in the current literature.
Table 3. Key Findings from the Narrative Review
Theme
Key Findings
Description
REFERENCES
Role of Digital
Transformation in
Sustainable HRM
Strategic
Instrument for
Sustainability
Digital transformation enhances
operational efficiency, fosters
innovation, and supports
sustainability goals when aligned
with sustainability strategies.
Hornungová & Petrová
(2025); Sharma & Kohli
(2023)
Impact on HR
Practices
HR processes (recruitment,
training, development,
maintenance, separation) are
significantly reshaped by digital
technologies, requiring
sustainability integration.
Andestari, Sabellah, &
Muafi (2024); Singh et
al. (2025)
Enhancing
Competitiveness &
Innovation
Digital tools and HR information
systems foster competitiveness,
streamline HR operations, and
improve decision-making.
Fenech, Baguant, &
Ivanov (2019); Alqarni
et al. (2023)
Digital
Competencies and
HRM
Development of
Digital Skills
Digital skills (AI literacy, data
analytics, technological
adaptability, and change
management) are critical for HR
sustainability.
Singh et al. (2025);
Mykhailovska et al.
(2025)
Role of HR in
Digital
Transformation
HR managers are pivotal in
shaping digital skill sets, fostering
a learning culture, and enabling
sustainability-driven innovation.
Sharma & Kohli (2023);
Singh et al. (2025)
Framework for
Sustainable HRM
Integration of
Digital &
Sustainable
Practices
Aligning digital HRM practices
with sustainability strategies
enhances performance, innovation,
and organizational resilience.
Andestari et al. (2024);
Singh et al. (2025); Ma,
Zhang, & Dong (2023)
Challenges &
Opportunities
Key barriers include resistance to
change, skills gaps, budget
constraints, and lack of
institutional support. Overcoming
these requires digital literacy
initiatives and supportive
leadership.
Mykhailovska et al.
(2025); Enaifoghe et al.
(2024)
Ethical
Considerations
Human-Centric and
Ethical Concerns
Digital HR raises issues such as
privacy, data security, AI bias,
employee well-being, and
environmental impact, requiring
transparent and accountable HR
practices.
Arora et al. (2024); Sani
& Mandina (2024)
The narrative review highlights that digital transformation functions as both a strategic enabler and a disruptor
of HRM practices, with significant implications for sustainability. As a strategic instrument, digital
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transformation drives efficiency, innovation, and sustainability integration, provided that digital initiatives are
aligned with broader organizational sustainability goals (Hornungová & Petrová, 2025; Sharma & Kohli, 2023).
Beyond improving HR functions such as recruitment, training, and employee engagement, digital technologies
encourage competitiveness and organizational agility through tools like HR information systems and AI-based
decision-making platforms (Fenech et al., 2019).
Central to this transformation is the development of digital competencies, which are vital for HR professionals
and employees to thrive in the digital era. Competencies such as data literacy, AI proficiency, continuous
learning, and adaptability not only enable digital adoption but also foster a culture of innovation and
sustainability (Singh et al., 2025; Mykhailovska et al., 2025). HR professionals play a significant role in
implementing these skills, hence positioning themselves as the key players of digital change and sustainability-
oriented organizational cultures (Sharma & Kohli, 2023).
The review further demonstrates that sustainable HRM is best achieved when digital practices are fully integrated
with sustainability objectives, thereby aligning workforce strategies with the ESG principles (Andestari et al.,
2024; Ma et al., 2023). However, this integration is not without challenges. Organizations often face barriers
such as limited resources, digital resistance, and competency gaps, which necessitate strong leadership, ongoing
training, and supportive infrastructures to overcome (Mykhailovska et al., 2025; Enaifoghe et al., 2024). Finally,
the adoption of digital competencies in HRM raises important ethical considerations. Issues such as employee
privacy, AI bias, data governance, job security, and well-being demand careful oversight and transparent policies
to ensure that digital transformation supports not only organizational goals but also human dignity and fairness
(Arora et al., 2024; Sani & Mandina, 2024).
Overall, the findings reinforce that digital transformation empowers sustainable HRM when it is mediated by
robust digital competencies, thereby empowering sustainable HRM by enhancing innovation, resilience, and
competitiveness while ensuring ethical and socially responsible practices. This synthesis provides the foundation
for developing the proposed conceptual framework that integrates digital transformation, digital competencies,
and sustainable HRM.
DEVELOPMENT OF CONCEPTUAL FRAMEWORK
The theoretical framework of this study is grounded in the Resource-Based View (RBV) and the Dynamic
Capabilities Theory, both of which provide comprehensive explanations of how organizations leverage internal
capabilities to achieve sustainable competitive advantage. The RBV emphasizes that organizational resources,
when valuable, rare, inimitable, and non-substitutable (VRIN), can yield long-term advantages, particularly
when directed toward strategic goals such as sustainability (Barney, 1991; Hart, 1995).
Resource-Based View (RBV) Theory
The Resource-Based View (RBV) provides a valuable theoretical foundation for understanding the strategic
importance of digital competencies in achieving sustainable competitive advantage. Rooted in the idea that
unique, inimitable, and non-substitutable resources drive organizational success, the RBV highlights how digital
capabilities serve as critical strategic assets in the digital economy. Specifically, digital competencies
encompassing IT knowledge, IT operations, and IT objects are instrumental in enabling firms to leverage
technology for enhanced market and developmental performance (Gibb & Haar, 2007). In public sector contexts,
such as Indonesia’s Ministry of Agrarian and Spatial Planning, the integration of digital competencies has been
shown to catalyze organizational transformation and improve operational efficiency (Mulianto et al., 2024).
These findings underscore that digital capabilities, when effectively cultivated, not only support process
innovation but also strengthen an organization’s ability to respond adaptively to changing environments.
Moreover, RBV emphasizes that digital transformation initiatives must align digital capabilities with broader
strategic objectives to yield performance benefits. For example, in small and medium-sized enterprises (SMEs),
the development of digital competencies plays a decisive role in building resilience and competitiveness,
particularly through the integration of digital technologies such as big data analytics, cloud computing, and the
Internet of Things (Inan, 2024; Edu et al., 2020). However, while digital transformation offers substantial
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opportunities for value creation, a significant number of initiatives fail due to the absence of coherent capability
development strategies. This gap highlights the necessity for firms to establish comprehensive and adaptive
digital transformation systems that ensure technology adoption is strategically aligned with business goals
(Mulianto et al., 2024). Within this framework, human capital emerges as a key mediating factor, as the
acquisition and application of digital skills among employees enhance the firm’s ability to exploit technological
innovations for improved organizational performance (Kampoowale et al., 2025; Alharthi & Soomro, 2025).
Ultimately, the RBV theory positions digital competencies as vital resources that contribute to long-term
sustainability and competitive differentiation. Organizations that invest in digital skills and capabilities can
effectively bridge technological potential with human-centered innovation, enabling the creation of value
through improved decision-making, productivity, and strategic agility. Consequently, digital competencies not
only reinforce the firm’s internal resource base but also drive the successful implementation of digital
transformation and sustainable HRM practices. By emphasizing the strategic integration of technological
proficiency, data literacy, and adaptive learning, RBV highlights that the true source of advantage in the digital
age lies not merely in technology itself, but in the distinctive capabilities of people and processes that harness it
effectively.
Dynamic Capabilities Theory
Meanwhile, Dynamic Capabilities Theory (DCT) highlights an organization’s ability to adapt, integrate, and
reconfigure resources in response to changing environments, making it especially relevant to digital
transformation and sustainable human resource management (Teece et al., 1997). Together, these theories
provide the foundation for understanding how digital competencies serve as critical resources that empower
sustainable HRM in the era of digital transformation.
Dynamic Capabilities Theory (DCT) offers a powerful lens for understanding how organizations continuously
adapt their internal resources to thrive in volatile digital and sustainability-driven landscapes. At its core, DCT
posits that competitive advantage stems not from static resources but from an organization’s ability to sense
emerging opportunities, seize them through reconfiguration, and transform its capabilities in response to
environmental shifts (Teece, 2007, Öztürk, 2024; de la Torre & De la Vega, 2025). In the context of Human
Resource Management (HRM), this translates into the deliberate cultivation and evolution of digital
competencies, such as data literacy, AI fluency, and digital change agility, which function as dynamic,
reconfigurable assets that enable HR functions to innovate sustainably. Rather than treating digital tools as
isolated inputs, DCT frames digital transformation as an ongoing process of capability building, wherein HR
systems are continuously reshaped to align with strategic sustainability goals and technological disruptions
(Demeter et al., 2021; Starke & Ludviga, 2025).
The operationalization of DCT in digital HRM unfolds through four interrelated capabilities. First, sensing
capability allows organizations to scan the external environment for digital trends and sustainability imperatives,
thereby informing proactive HR strategies (Demeter et al., 2021). Second, absorptive capacity enables firms to
assimilate new digital knowledge and integrate it into HR practices. For example, by using people analytics for
green talent forecasting and thus convert digital transformation into intellectual capital (Ardda et al., 2025;
Chaubey, 2025). Third, integrative capability ensures that digital infrastructure, HR processes, and employee
skills are cohesively aligned; for instance, digital transformation teams must coordinate data literacy with
business process redesign to drive HR innovation (Li, 2023). Finally, relational capability leverages internal and
external networks, including cross-functional collaboration and industry partnerships, to co-create sustainable
HR solutions and amplify innovation impact (Demeter et al., 2021). Together, these capabilities form a dynamic
ecosystem in which digital competencies are not fixed traits but evolving organizational routines.
This adaptive process directly fuels HR innovation through strategic digital HRM (Alexandro, 2025) and Human
Resource Digital Transformation (HRDT), which is a multidimensional construct that blends digital
infrastructure with individual creativity to enhance organizational resilience in turbulent times (Bansal et al.,
2023). Empirical evidence shows that when Sustainable HRM leverages dynamic capabilities, it triggers a chain
mediation of organizational learning and resilience, which synergistically boosts innovation in areas such as eco-
efficient performance management and inclusive digital recruitment (Wang et al., 2025). Critically, this process
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is amplified by leadership that champions digital competency development and embeds it within broader
sustainability strategies (Khanh & Cuong, 2025). Thus, DCT not only explains how digital competencies evolve
but also clarifies why they are indispensable for sustaining HR innovation in the digital-sustainability nexus,
positioning HR not as a passive adopter of technology but as an active architect of adaptive, future-ready, and
responsible people practices.
In this study, these theoretical perspectives clarify the role of digital competencies as mediating mechanisms
linking digital transformation to sustainable HRM. RBV highlights the strategic value of digital skills,
technological know-how, and innovative HR practices as resources that strengthen organizational sustainability
outcomes (Sharma & Kohli, 2023; Singh et al., 2025). Dynamic capabilities, on the other hand, emphasize how
HR professionals and organizations must continuously sense, seize, and transform digital opportunities to embed
sustainability into HRM practices (Ma et al., 2023). This conceptualization allows the framework to move
beyond static resource possession toward adaptive resource orchestration, where digital competencies act as
enablers of innovation, employee resilience, and ethical HR practices (Fenech et al., 2019; Mykhailovska et al.,
2025).
From a theoretical standpoint, the integration of RBV and Dynamic Capabilities Theory provides a nuanced
understanding of how digital transformation fosters sustainable HRM, while also contributing to the literature
on HR digitalization and sustainability. Conceptually, this framework positions digital competencies as a
mediating construct, connecting the technological and human aspects of organizational sustainability.
Practically, it offers guidance for HR practitioners and policymakers to design interventions that not only build
digital literacy but also embed sustainability in HR strategies, thereby enhancing organizational resilience,
innovation, and ethical responsibility (Enaifoghe et al., 2024; Arora et al., 2024). In conclusion, this conceptual
framework provides a comprehensive lens to examine the interconnectedness of digital transformation, digital
competencies, and sustainable HRM, offering both scholarly insights and actionable implications for future
research and practice.
Figure 2: Proposed Conceptual Framework
Proposition Development
Digital transformation affects digital competencies
Digital transformation significantly shapes the development of digital competencies by driving organizations to
adapt their workforce capabilities to meet emerging technological demands. As digital technologies redefine
HRM processes, such as recruitment, performance management, and learning, employees are required to acquire
new skills in data analysis, artificial intelligence, and digital collaboration to remain effective contributors
(Lukita et al., 2024; van den Berg et al., 2020). Studies emphasize that digital transformation not only
necessitates technical proficiency but also promotes adaptive competencies, such as resilience, change
management, and continuous learning, which enhance organizational agility (Zhang et al., 2024; Espina-Romero
et al., 2024). Moreover, HR professionals are tasked with fostering digital literacy across the workforce to ensure
alignment with strategic digital initiatives and sustainability goals (Hornungová & Petrová, 2025; Andestari et
al., 2024). Thus, digital transformation acts as a catalyst that encourages employees and organizations alike to
develop and enhance digital competencies essential for competitiveness and sustainable HRM.
Proposition 1: Digital transformation positively influences the development of digital competencies within
organizations
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Digital competencies affect sustainable HRM
Digital competencies are increasingly recognized as essential enablers of sustainable HRM because they enhance
both the strategic and operational capacities of organizations to align digital transformation with sustainability
goals. Employees equipped with digital skills, such as data-driven decision-making, AI-based HR analytics, and
technology-enabled collaboration, are more capable of fostering HR practices that support long-term
organizational resilience and sustainability (van den Berg et al., 2020; Zhang et al., 2024). Furthermore, the
development of digital competencies encourages continuous learning, adaptability, and innovation, which are
critical for embedding sustainable practices within HRM functions, including talent management, training, and
employee engagement (Andestari et al., 2024; Espina-Romero et al., 2024). HR professionals play a pivotal role
in this process by cultivating digital literacy across the workforce, thereby promoting inclusive, ethical, and
environmentally responsible HR strategies (Hornungová & Petrová, 2025; Lukita et al., 2024). As organizations
navigate the challenges of the digital era, such as rapid technological change and sustainability pressures, digital
competencies serve as a bridge linking digital transformation to sustainable HRM practices.
Proposition 2: Digital competencies positively influence sustainable human resource management by enabling
organizations to integrate technological advancement with sustainability-driven HR practices
Digital transformation affects sustainable HRM
Digital transformation has become a critical driver in reshaping sustainable human resource management (HRM)
by fundamentally altering how organizations design, implement, and monitor HR practices to align with long-
term sustainability objectives. Through the integration of digital technologies such as e-HRM systems, artificial
intelligence, and data analytics, organizations can enhance recruitment, training, performance evaluation, and
employee engagement processes while embedding sustainability principles within these functions (Fenech et al.,
2019; Alqarni et al., 2023). Furthermore, digital transformation strengthens organizational agility, enabling HRM
to respond proactively to ESG requirements, while promoting inclusivity, efficiency, and innovation in
workforce management (Lou et al., 2024; Hornungová & Petrová, 2025). By leveraging digital tools, HR
departments can reduce resource consumption, foster green practices, and create future-ready workplaces that
balance technological progress with human and environmental well-being (Sharma & Kohli, 2023; Singh et al.,
2025). Therefore, digital transformation not only modernize HR systems but also acts as a strategic enabler of
sustainable HRM by integrating digital and sustainability imperatives into organizational strategy.
Proposition 3: Digital transformation positively influences sustainable human resource management by
embedding digital technologies into HR practices that drive organizational efficiency, innovation, and
sustainability
Mediating Role of digital competencies on the relationship between digital transformation and sustainable
HRM
Digital competencies are widely recognized as the essential mediating mechanism through which digital
transformation initiatives translate into sustainable HRM practices. While digital transformation introduces
advanced technologies and reshapes HR processes, its effectiveness largely depends on the workforce’s ability
to acquire, apply, and adapt digital skills to support long-term sustainability goals (Lukita et al., 2024; van den
Berg et al., 2020). Competencies in areas such as data analysis, change management, and digital literacy enable
HR professionals to strategically align technological adoption with green and sustainable practices (Zhang et al.,
2024). Without the development of digital competencies, digital transformation risks being a superficial
technological upgrade rather than a driver of sustainable value creation (Espina-Romero et al., 2024). Moreover,
digital competencies empower employees and HR leaders to integrate ethical and sustainability considerations,
ensuring that digital tools foster innovation, inclusivity, and resilience within the workforce (Mykhailovska et
al., 2025; Arora et al., 2024). Therefore, digital competencies act as the bridge that connects digital
transformation with the realization of sustainable HRM outcomes by ensuring that technological advancements
are effectively implemented as part of HR strategies and practices.
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Proposition 4: Digital competencies mediate the relationship between digital transformation and sustainable
HRM, such that higher digital competencies strengthen the positive effect of digital transformation on sustainable
HRM
CONCLUSION
This study develops a conceptual framework that positions digital competencies as a mediating factor linking
digital transformation and sustainable HRM. The framework highlights that while digital transformation
establishes the technological foundation for sustainability, the realization of this potential in practice depends
largely on the development of relevant digital skills and competencies. Through the integration of these
dimensions, the study demonstrates how organizations can effectively align technological innovation with
sustainability-oriented HRM objectives. From a theoretical standpoint, this research extends existing HRM and
sustainability literature by introducing digital competencies as a bridging construct that connects technological
advancement with human-centered sustainability outcomes. Furthermore, it enriches traditional HRM theories
by conceptualizing digital competencies not merely as operational tools but as strategic assets that enhance
organizational adaptability, innovation, and long-term sustainability.
In addition, this framework offers valuable practical implications for HR professionals and organizational
leaders. It emphasizes the importance of developing digital competencies through structured training programs,
continuous learning opportunities, and adaptive talent management strategies. Organizations that integrate
digital literacy and adaptability into their HR practices are more likely to achieve workforce sustainability,
promote environmental responsibility, and secure a lasting competitive advantage. However, as a conceptual
paper, this study is inherently limited by the absence of empirical testing, which may restrict the generalizability
of its propositions.
Therefore, future research should focus on empirically validating the proposed model using a combination of
quantitative approaches, such as structural equation modelling, and qualitative methods, such as case studies, to
examine its relevance across different industries and cultural contexts. Moreover, longitudinal investigations
could provide further insights into how the relationship between digital transformation, digital competencies,
and sustainable HRM evolves over time. Future studies should also consider ethical dimensions, including
digital inclusion, employee well-being, and data privacy, to enhance the comprehensiveness and practical
relevance of the framework. Overall, this study not only advances the theoretical discourse on sustainable HRM
but also raises new questions about how digital competencies can serve as the key link connecting technological
innovation to human-centered sustainability in organizational practice.
ACKNOWLEDGEMENTS
The authors would like to express their sincere gratitude to the Kedah State Research Committee, UiTM Kedah
Branch, for the generous funding provided under the Tabung Penyelidikan Am. This support was crucial in
facilitating the research and ensuring the successful publication of this article.
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