Linking Digital Transformation and Sustainable HRM: A Conceptual Framework on the Mediating Role of Digital Competencies

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.