Digital Transformation of HR: How AI and Talent Management Practices Drive Organizational Innovation

This study investigates the critical role of digital transformation in Human Resource
Management (HRM) through the integration of Artificial Intelligence (AI) and strategic talent management
practices in driving organisational innovation. In an era of rapid technological advancement, organisations are
increasingly leveraging AI-driven tools to transform traditional HR functions such as recruitment, performance
management, employee engagement, and workforce planning. The study explores how AI adoption in HR
practices, when combined with effective talent management strategies, significantly enhances operational
efficiency, decision-making, and organisational innovation outcomes. Through quantitative research involving
120 respondents from organisations adopting digital HR practices, the study examines key variables including
AI adoption, AI in HR, talent management, employee engagement, and organisational innovation. Statistical
analyses including correlation, regression, ANOVA, and chi-square tests confirm strong positive relationships
between digital HR practices and innovation. The findings highlight that employee engagement serves as a
critical mediating factor in linking AI-driven HR practices to innovation. The study recommends that
organisations invest in AI-driven training, strengthen talent management strategies, and build participatory
digital platforms to sustain a culture of innovation and competitive advantage.
KEYWORDS: Digital Transformation, Human Resource Management, Artificial Intelligence, Talent
Management, Employee Engagement, Organisational Innovation, AI in HR, HR Analytics, Engineering
Services, Techbro Engineering Solutions, Chennai.