Digital Transformation Model and the Role of HR in Indonesian MSMEs

Abstract

This study looks into how important human resources (HR) are to Indonesia's Micro, Small, and Medium-sized Enterprises (MSMEs) as they embark on a digital transformation. The study uses a quantitative method with a sample of 568 participants and focuses on the impact of staff skills, digital strategy, employee retention, and satisfaction. The findings indicate that there are complex interactions at play: employee skills show a negative correlation with the speed at which digital transformation is occurring, but employee retention, satisfaction, and digital strategy have a beneficial impact on both digital transformation and competitiveness in the global market. The study gives HR professionals useful insights and draws attention to the complex factors that will determine MSMEs' digital future. This study adds to the growing body of knowledge on HR and digital transformation by offering insightful recommendations for businesses attempting to navigate the challenging terrain of the Fourth Industrial Revolution.

The Impact of Digital Transformation on Human Resource Development in the Online Business Paradigm

“…Furthermore, digital transformation also has a significant impact on the recruitment and retention processes of Human Resources (HR) in the online business realm [26]. In this context, employees who demonstrate agile digital skills and the ability to adapt quickly become increasingly valuable, creating fierce competition for businesses in attracting and retaining such talents [14].…”

“…As businesses embark on this transformative journey, fostering a culture of continuous learning, experimentation, and resilience emerges as a linchpin for success. Moreover, the recalibration of performance metrics and the redefinition of recruitment and retention strategies underscore the pivotal role of HR in driving organizational growth and competitiveness in the digital era [25,26]. Effective leadership, characterized by adaptability, communication prowess, and visionary acumen, is essential in steering organizations through the tumultuous currents of digital transformation.…”