Unpacking the Black Box: How AI Capability Enhances Human Resource Functions in China’s Healthcare Sector

Artificial intelligence (AI) is transforming organizational functions across sectors; however, its application to human resource management (HRM) within healthcare remains underexplored. This study aims to unpack the black-box nature of AI capability’s impact on HR functions within China’s healthcare sector, a domain undergoing rapid digital transformation, driven by national innovation policies. Grounded in resource-based theory, the study conceptualizes AI capability as a multidimensional construct encompassing tangible resources, human resources, and organizational intangibles. Using a structural equation modeling approach (PLS-SEM), the analysis draws on survey data from 331 professionals across five hospitals in three Chinese cities. The results demonstrate a strong, positive, and statistically significant relationship between AI capability and HR functions, accounting for 75.2% of the explained variance. These findings indicate that AI capability enhances HR performance through smarter recruitment, personalized training, and data-driven talent management. By empirically illuminating the mechanisms linking AI capability to HR outcomes, the study contributes to theoretical development and offers actionable insights for healthcare administrators and policymakers. It positions AI not merely as a technological tool but as a strategic resource to address talent shortages and improve equity in workforce distribution. This work helps to clarify a previously opaque area of AI application in healthcare HRM.