Digital HR Systems Boost Innovation Only When Employees Have Strong Digital Skills, Indonesian Study Shows
Electronic Human Resource Management (E-HRM) systems can significantly increase organizational innovation, but their impact depends heavily on employees’ digital skills. This conclusion comes from a peer-reviewed study by Yohan Fitriadi and Wellia Novita of Universitas Putra Indonesia YPTK Padang, published in 2026 in the International Journal of Integrative Sciences (IJIS). Based on survey data from employees in organizations that already use digital HR systems, the research highlights a clear message for the digital era: technology delivers results only when people are ready to use it well.
The findings are important as companies across Indonesia and other developing economies accelerate digital transformation. Many organizations invest in HR software to modernize recruitment, training, and performance evaluation. This study shows that such investments lead to real innovation only when employees possess adequate digital competency.
Digital HR and the Innovation Challenge
Human resource management has changed rapidly with the spread of digital technology. Tasks that once relied on paperwork and manual administration are now handled through online platforms. These systems, commonly known as Electronic Human Resource Management (E-HRM), support activities such as online recruitment, digital training, performance appraisal, and talent management.
E-HRM systems are widely promoted as tools to improve efficiency and transparency. However, whether they truly help organizations become more innovative has remained an open question. Previous international studies produced mixed results, with some showing positive effects on innovation and others finding limited impact.
Fitriadi and Novita place their research within this debate and focus on one key factor often overlooked: digital competency. Digital competency refers to employees’ ability to understand, use, and apply digital technologies effectively in their daily work.
How the Research Was Conducted
The study used a quantitative survey design involving 210 employees working in organizations that had already implemented E-HRM systems. Respondents were selected because they regularly interacted with digital HR platforms in their jobs.
Participants completed an online questionnaire measuring three main aspects:
1. The level of E-HRM system implementation in their organization
2. Their own digital competency
3. The degree of organizational innovation, such as new work processes and practices
The researchers analyzed the data using statistical methods to examine direct relationships and interaction effects. This approach allowed them to assess not only whether E-HRM influences innovation, but also whether digital competency strengthens that relationship.
Key Findings Explained Simply
The results show a clear pattern that is easy to understand:
1. E-HRM systems positively affect organizational innovation. Organizations with more advanced digital HR practices tend to introduce new ideas and processes more frequently.
2. Digital competency directly increases innovation. Employees with strong digital skills are more likely to contribute to creative problem-solving and process improvement.
1. Digital competency strengthens the impact of E-HRM. The innovative benefits of E-HRM systems are significantly higher when employees have high digital competency.
Statistical analysis reveals that digital competency explains a substantial portion of innovation outcomes. In workplaces where digital skills are weak, E-HRM systems are often used only for basic administration, limiting their strategic value.
In short, digital HR platforms work best when employees know how to use them beyond routine tasks.
Why Human Skills Still Matter Most
The study reinforces an important lesson for the digital age: innovation is not driven by technology alone. While E-HRM systems provide digital infrastructure, employees determine how effectively that infrastructure is used.
According to Fitriadi and Novita from Universitas Putra Indonesia YPTK Padang, digitally competent employees are more willing to explore advanced system features, share knowledge across departments, and use data to improve decision-making. These behaviors create an environment where innovation can flourish.
Without sufficient digital skills, employees may resist new systems or use them minimally, reducing the return on technology investments.
Implications for Business, Education, and Policy
The findings have practical implications for several groups.
For business leaders, the message is clear. Investing in E-HRM software should be matched with investments in digital skill development. Training programs, continuous learning initiatives, and supportive leadership are essential to turn digital HR into innovation.
For human resource professionals, the study highlights a strategic role beyond system management. HR departments are well positioned to design programs that build digital competency and align technology with human capability.
For educators and policymakers, the research underscores the importance of digital literacy at a broader level. As organizations increasingly rely on digital systems, workforce readiness becomes a key factor in national competitiveness and economic growth.
As the authors ethically paraphrase in their discussion, Fitriadi and Novita of Universitas Putra Indonesia YPTK Padang emphasize that digital HR technologies contribute to innovation most effectively when supported by strong employee digital competencies.
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