The Mediating Role of Organizational Trust in the Relationship Between Digital Human Resource Management and Strategic Human Capital

Abstract Digital human resource management is the transformational move in attracting, developing, and retaining talent with the help of technology-powered systems in the organization. Although such practices are likely to improve strategic human capital, they would be effective as far as employees are perceptive of the organizational environment. This study will analyze the mediating aspect of organizational trust on the relationship between digital human resource management and strategic human capital. The systematic analysis of modern literature was taken in order to explain the impact of digital HRM practices on trust building and, hence, the process of strategic human capital formation. With the analysis, it is shown that digital HRM increases transparency, fairness, and consistency in HR practices, which improve the confidence of employees towards the organization. High organizational trust, respectively, facilitates better knowledge growth, increased participation, and alignment with the strategic objectives leading to better strategic human capital achievements. The results indicate that virtual HRM is not adequate on its own in creating strategic human capital, unless it is complemented with trust-building systems in the organizational environment. The suggested framework highlights the relevance of incorporating digital-based HRM practices with trust-building procedures to make the most out of them.