Impact of Digital Transformation on Human ResourceManagement: Linking Competency Development to Employee Performance

This study examines the impact of digital transformation on employee performance, with digital-based human resource ‎‎(HR) competencies serving as a mediating factor in public companies in Indonesia. A quantitative approach was em-‎ployed, using an online survey administered to 100 permanent employees who had been actively involved in digitalized ‎HR management systems for at least one year. The study adopted an explanatory research design, and data were ana-‎lyzed using descriptive statistics, correlation analysis, and multiple linear regression. Findings indicate that digital trans-‎formation significantly enhances employee performance both directly and indirectly through the development of digital ‎HR competencies. Specifically, the adoption of technology-based work systems, digitalization of HR processes, and the ‎establishment of a digital work culture improve employees’ digital technical, analytical, adaptive, and collaborative abil-‎ities, which in turn positively influence productivity, efficiency, and work innovation. The results confirm that digital-‎based HR competencies partially mediate the relationship between digital transformation and performance, highlighting ‎the importance of employee readiness and skill development in realizing the benefits of technological adoption. The ‎study contributes to the Resource-Based View (RBV) perspective by demonstrating that human capital with advanced ‎digital competencies represents a unique, inimitable resource that creates sustainable competitive advantage. Practically, ‎the findings suggest that organizations should invest in continuous digital competency development, integrate digital ‎technologies into HR strategy, and cultivate a supportive digital work culture to optimize performance outcomes‎.