A Critical Review on Digital Hr Transformation and Employee Engagement in the Era of Industry 5.0

The shift from Industry 4.0 to Industry 5.0 marks a profound paradigm evolution in strategic human resource management (HRM), transitioning from pure technological automation to human-centric socio-technical synergy, sustainability, and organizational resilience. This critical review synthesizes peer-reviewed literature published between 2021 and 2026 to evaluate the influence of digital HR transformation—encompassing artificial intelligence, predictive people analytics, cloud-based HRIS, and collaborative robotics (cobots)—on multi-dimensional employee engagement (vigor, dedication, and absorption). Guided by the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA 2020) framework, 16 benchmark empirical and conceptual studies were systematically selected and categorized. The synthesis reveals that while digital HR transformation significantly drives operational efficiency, its direct impact on employee engagement is mediated by digital fluency, perceived organizational support, and psychological safety. Furthermore, algorithmic transparency and responsible data governance serve as critical moderators that mitigate techno-stress, privacy anxieties, and algorithmic burnout. The paper delivers an integrative socio-technical framework for Industry 5.0, offering strategic guidance for organizational leaders seeking to align cutting-edge HR technologies with human well-being and sustainable performance.