Digital Transformation in SME HR Operations: A Conceptual Framework for Payroll and Leave Process Automation

Digitalisation is rapidly reshaping operational landscapes, urging Malaysian small and medium-sized enterprises (SMEs) to modernise key internal functions, particularly in human resource management (HRM). However, many SMEs continue to depend on manual, paper-based systems for payroll and leave processes, resulting in inefficiencies, human errors, and regulatory compliance risks. This paper aims to develop a conceptual framework for SMEs to transition towards digital HR operations through a structured, two-cycle intervention model: (1) digitizing core processes; (2) decentralizing approvals and integrating mobile-based attendance tracking. Guided by the Technology Acceptance Model (TAM) and Lewin's Action Research framework, the proposed framework focuses on usability, scalability, and user acceptability as a core for organizational change behaviour. This model is expected to improve accuracy, lighten manual workloads, and enhance decision-making across departments. The framework offers practical value for SME leaders, policymakers, and practitioners, while laying the groundwork for future empirical research into HR digitalisation across areas such as onboarding, performance appraisal, and employee engagement.