The process, challenges, and demands of HRM digital transformation have been discussed in greater detail in the literature. Existing studies have focused on IT systems and governance (Ceipek et al., 2021), strategy (Dohale et al., 2022), employee adoption and competencies (Shiau et al., 2024), management demands (Veile et al., 2020), HR practitioners’ competencies (Van den Berg et al., 2020), diversity and safety (Walkowiak, 2021), and conflict resolution and stakeholder engagement (Tsai et al., 2023). Gregory et al. (2018) find that the IT system in an organisation is governed by how consumers use IT in everyday life. As such, IT consumerization, the way consumers use IT in their personal lives, influences organisations’ digital transformation. Ceipek et al. (2021) argue that an over-representation of family members in the top management could hinder digital transformation. Dohale et al. (2022) highlight the importance of aligning corporate strategy with business and operational level strategy.

Talent management has emerged as a key theme of digital transformation, while there is an emerging group of literature focusing on diversity, safety, and inclusion issues. Veile et al. (2020) discuss the key managerial demands arising from digital transformation and brand key managerial activities as (1) driving business change, (2) mastering fluid and loose organisational structure, (3) mastering talent complexity, and (4) prioritising learning. Shiau et al. (2024) explore the employee adoption of technology and suggest that switching benefits, job insecurity, colleague options, top management support, and inertia determine the adoption of facial recognition payment technology. Hansen et al. (2024) highlight that worker competencies play a critical role in the success of digital transformation.

Van den Berg et al. (2020) suggest that human resource practitioners require different sets of competencies in the context of digitally transformed organisations. These competencies include, among others, the ability to design, extract, understand, analyse, interpret, and apply information (data), continuous learning, stakeholder relationship management, and cultivating positive organisational practises (Van den Berg et al., 2020). Tsai et al. (2023) underscore the importance of conflict resolution for the success of the digital transformation process. They suggest a tailored approach to conflict resolution based on the type of the conflict, rather than a one-size-fits-all approach. Coplan (2024) highlights the importance of stakeholder engagement for the success of the digital transformation process. Mueller et al. (2024) explore the challenges faced by IT project managers when transitioning from traditional systems to agile teams, which rely on self-management and autonomy. The study highlights specific strategies to resolve the challenge and design of an effective agile team.

Rocha et al. (2024) argue that the meaning of digital transformation is not fully understood by most firms, limiting digital maturity. The study suggests four important areas to focus on: (1) Industry 4.0, (2) Competition, (3) Decision Making, and (4) Data Analytics. Industry 4.0 has been a recurring theme of digital maturity and digital transformation. Industry 4.0 or the “Fourth Industrial Revolution refers to the technological revolution, such as Artificial Intelligence (AI), big data, Robotics, Augmented and Virtual Reality, Blockchain, and other emerging technologies. These technologies remain highly relevant to meet emerging challenges of human resource practises in the digital age (Nicolás-Agustín et al., 2022). Conte and Siano (2023) discuss the adoption of big data analytics for internal and recruitment communication and argue that the development of HR analytics is hindered by workers’ skills, data quality, and short-term perspectives. AI is now encompassing technology in all areas of HR operations, including recruitment, training, employee engagement, and employee retention (Mohamad et al., 2022). However, sustained benefits of AI can only be realised when the technology adoption becomes part of the organisational strategy (Kaushal et al., 2023).

Innovation is the key to firm’s success, and digital transformation can influence the innovation behaviour of firms (Lu et al., 2023). The thematic mapping and co-occurrence network derived in this review identifies innovation management as a key theme (Figure 5 and Figure 6). Innovation refers to improvements in process and/or outcome (product or service) (Koster & Benda, 2020). Innovative HR practises in the digital age need to be data-driven. Strategic adoption of advanced technologies (e.g., AI, machine learning, cloud-based platforms, and analytics) can enhance efficiency in all areas of HR operation, e.g., recruitment and talent acquisition, training and development, employee learning and engagement, data-driven performance management, workforce flexibility, and strategic decision making (Bondarouk & Brewster, 2016; Vrontis et al., 2021). While investment in these technologies will keep the HR department relevant and competitive, they cannot be alone as a source of competitive advantage in the medium to long run (Alam et al., 2022; McCartney & Fu, 2022; Shahiduzzaman et al., 2018).

Several factors moderate the relationship, particularly in the context of technology–human capital interaction. Using the business-focused work personality data of 4758 human resources engaged in 72 high-tech European firms, Caputo et al. (2019) find evidence of a significant relationship between work motivation and social competencies and the firms’ economic performance. In addition, firms’ investment in big data mediates the relationship between the organisational behaviour of human resources and firms’ economic performance (Caputo et al., 2019). However, the effects of digitalisation on the firm performance of an organisation in the short, medium, or long run depend on its product life cycle and industry (Lichtenthaler, 2020). For example, the information technology industry has a shorter product life cycle, which means rapid technology adoption. For other sectors, such as construction, services, agriculture, or public administration, the uptake would be slower.

Innovative HRM can be a predictor of organisational innovation and a source of competitive advantage. Achieving this requires a fundamental paradigm shift in the way employees work and become innovative. In the new economy, the innovative process of an organisation is increasingly driven by digital talent, who demand more autonomy, purpose, ownership, and flexibility” (Veile et al., 2020, p. 36). A study by Kar et al. (2021) highlights the talent management behaviour of firms, suggesting that as finding new talent becomes challenging in supporting digital transformation, organisations prioritise in-house talent development to meet upcoming needs. Successful digital transformation requires building innovative digital teams characterised by various team-based levers, such as diverse and targeted team composition, iterative goal setting, continuous learning, and talent management (Guinan et al., 2019). Additionally, communication competencies and digital competencies play a significant role in shaping employee readiness for the future of work (David et al., 2024).

Diversity management is one of the key pillars of HRM. Walkowiak (2021) finds that digital technologies support HR practice for better inclusion of neuro-diverse workers. Management team characteristics, such as diversity and the average education level of the top management team (TMT), affect firms’ digital orientation positively (Walkowiak, 2021). Walkowiak (2021) focuses on the importance of safety and suggests that the working condition of employees influences innovation practises. A new and emerging area of research on HR digitalisation focuses on green innovation. El-Kassar and Singh (2019) highlight that integrating big datawith HR practises enhances the environmental performance of firms. Based on 1750 listed industrial enterprises for 2011–2020, Wang et al. (2024) find that digital transformation significantly improves the green innovation of companies. Digital transformation has the potential to influence all areas of green innovation, including green technology innovation (GTI), green process innovation (GPI), and green management innovation (Wang et al., 2024).

COVID-19 has profoundly shaken the HRM landscape, offering new insights into crisis management, handling furloughs and layoffs, supporting remote work and collaboration, and addressing employee welfare (Hamouche, 2023). Digital technologies have emerged as a central lever to cope with this “grand challenge”, driving a new wave of innovation, resilience, and adaptability in human resource practises (Carnevale & Hatak, 2020).

A key lesson learned from COVID-19 is the necessity of continuously learning and fostering creativity to adapt to uncertain external conditions. In the early twentieth century, Joseph Schumpeter alluded to the concept of “Creative destruction”, which describes a process in which “old fashioned means of doing things to be buried in tandem with emerging creativity–this is to make sure that human ways of doing things in the of new technologies supersede that of preceding innovations, through the ingenuity of human creativity” (Jackson, 2021, p. 11). COVID-19 exemplifies this disruptive power. During the pandemic, as remote work and virtual collaboration became a norm, widespread adoption and acceptance of digital technologies speeded up. However, challenges persisted in boosting workers’ productivity, collaboration, and innovation. Remote work and flexibility remain an integral part of business in the post-COVID era, with studies showing evidence that emerging technologies are helping companies to recover from COVID-19 shock, delivering strategic advantage (Cumba et al., 2024). Employee productivity increases with the increase in work flexibility, enabled by digital technologies. As technologies continue to disrupt the way people work, adaptation to these technologies requires skilling and reskilling workers to align with the changing roles. Overall, COVID-19 has not only transformed work practises but also laid the foundation for a more agile, productive, and technology-driven human resource management system (García-Fernández et al., 2024).