The Impact of Digital Human Resource Practices on Employee Development in the Banking Sector in Sri Lanka

Abstract

In contemporary human resource management, increasing attention has been directed toward the role of digital transformation in shaping employee development. The banking sector in Sri Lanka is characterized by high competitiveness and a strong reliance on technology, rendering employee skills and adaptability essential for organizational success. This study investigates the impact of Digital Human Resource Practices (DHRPs) on employee development, concentrating on the dimensions of Digital Recruitment and Digital Onboarding, with Performance Management and Competence Development identified as key outcomes within the banking sector of Sri Lanka. The research employs a quantitative design and collects data from 229 employees across five major banks using a stratified random sampling technique. A structured self-administered questionnaire was utilized for data collection, and SPSS (version 27.0) was employed for data analysis. Statistical methods, including descriptive analysis, correlation, and multiple regression, were applied to test the hypotheses. The findings reveal that DHRPs significantly positively impact employee development, with both digital recruitment and onboarding contributing robustly to performance management and competence development. These results indicate that the effective implementation of digital HR practices enhances employees' skills, motivation, and confidence, ultimately bolstering organizational performance. This study contributes to the human resource management literature by validating the relevance of the Technology Acceptance Model, Human Capital Theory, and the AMO Framework within the context of digital banking. The practical implications emphasize the necessity for banking institutions to integrate digital HR practices into their strategic frameworks to foster a skilled and motivated workforce.