INNOVATION CAPABILITY: DIGITAL TRANSFORMATION OF HUMAN RESOURCES AND DIGITAL TALENT IN SMES

This research investigated the relationship between the digitalization of human capital, digital talent, and innovation capabilities among Business Unit employees. The mediating role of digital talent in the digital transformation of human resources and innovation capability among SMEs was examined. Business Unit employees were tested using the PLS-SEM method, and a survey was conducted on SME Business Unit employees. The purposive technique was developed with convenience sampling and chosen as a non-probability sampling technique. The primary data sources were 185 respondents who worked within the SME business unit in Indonesia. The findings indicate that the digital transformation of human resources, talent, and innovative capacity has a strong positive correlation. The link between innovative capabilities and digital transformation is mediated by digital talent. This study contributes to the human resources post-recruitment, talent management, and digital talent literature in the management function, and it underscores the crucial role of human and technological factors in the digital transformation of human resources, which is increasingly visible on the path to organizational success.