Digital Transformation and Human Resource Management: Their Impact on Business Profitability and Contribution to Sustainable Economic Growth (SDG 8)

Objective: This study explores the relationship between human resource management (HRM) and business profitability, emphasizing the impact of digital transformation on this dynamic. The aim is to understand how technological advancements modify traditional HRM practices and influence financial outcomes. Theoretical Framework: The research builds on theories of human capital, firm performance, and digitalization. Studies such as those by Turulja and Bajgoric (2018) and Androniceanu et al. (2020) highlight the pivotal role of HRM and digital innovation in organizational success, serving as the foundation for this investigation. Method: A systematic literature review was conducted, analyzing 29 studies that examine the interplay between HRM, digitalization, and profitability. Articles were categorized by their research approaches and the nature of the relationships studied, with data synthesized to identify recurring themes and patterns. Results and Discussion: Findings indicate that 84 % of articles reviewed reported a positive relationship between HRM and profitability, often mediated by variables such as job satisfaction and innovation. Regarding digital transformation, 90 % of studies highlighted its positive influence, contingent on factors such as industry type, organizational characteristics, and workforce skills. Challenges include skill gaps and regulatory barriers. Research Implications: The study underscores the necessity of aligning HRM strategies with digital transformation initiatives to enhance productivity and profitability. It also highlights the importance of industry-specific approaches and skill development. Originality/Value: By integrating HRM and digitalization perspectives, this research contributes a comprehensive understanding of their combined effects on firm performance, offering actionable insights for businesses navigating digital transformation.