PLS-SEM-Based Investigation of AI's Transformative Impact on Human Resources Practices: Insights from Industry 4.0 HR Digitalization

Abstract

This study employs PLS-SEM to investigate the impact of artificial intelligence (AI) on human resource (HR) digitalization within the framework of Industry 4.0. Employing a descriptive research design coupled with analytical and empirical methods, data were collected from 271 HR professionals in Chennai and Bengaluru, India, representing diverse industries including IT, ITES, manufacturing, and services. The study utilized a structured questionnaire to gather demographic information and assess AI applications in HR, utilizing a five-point Likert Scale. Based on data analysis, the study found significant positive relationships between various factors, including quantifying employee productivity, workplace health and safety, performance feedback, payroll automation, and employee well-being, with HR digitalization, organizational network analysis (ONA) and organizational design. Additionally, AI was shown to enhance organizational design and agility within HR functions. These findings highlight the transformative capacity of AI in reshaping HR practices, organizational dynamics, and workforce well-being in thedigital age. By providing empirical evidence, this study contributes to existing literature and outlines implications for HR professionals, organizational leaders, policymakers, and researchers, emphasizing the need for continued investment in AI technologies and strategicHR initiatives to navigate the challenges and opportunities of Industry 4.0.