Digital Human Resource Management and Its Role in Achieving Competitive Advantage: An Exploratory Study of the Opinions of a Sample of Leaders in Private Banks.

A- First variable: Digital human resource management

1. Concept of Digital Human Resource Management

Terms such as digital human resource management (DHRM) and other designations applied in the sphere of social sciences differ significantly. As a result of the increased use of modern technologies, the role of human resources has to be reconsidered, which is why the concept of digital management has been adopted. This is a process aimed at serving human resource management and the consumers of internet-based systems in HR departments, with the aim of enhancing the services offered to the organization (Al-Sharbini, 2025: 1242).

According to (Zouqar, 2024: 82) DHRM can be explained as a radical change in human resource functioning based on matching culture, skills, organizational structure, and core processes to create a balance between efficiency and innovation (Asraf, 2020: 238). It involves the application of the available technologies in the organization in the processes that facilitate different HR activities including recruitment, selection, appointment, training, and performance appraisal as well as administering all data concerning current and potential employees.

(Strohmeier, 2020: 351) underlines that DHRM is a technical process; as a result, the HR data recorded in paper-based or analog formats are converted into digital forms that can be automatically processed and represented in different electronic systems. (García-Fernández et al., 2024: 3) further adds that it is a collection of programs, devices, and digital assets that will focus on automation of HR operations and creation of practices that are both consistent and of high quality, facilitated by the current digital transformation.

Further, DHRM is understood as a practice that makes heavy use of digital tools in recruitment, selection, communication, training and career development. Not solely are folks beginning to affiliate the two concepts on this regard however it’s extra typical for firms to not take note of if they’ve sear pasting or no mirroring. This is part of what helps the organization to select the right candidate for a job and enhances participant growth in that work environment (Varadaraj & Al Wadi, 2021: 44).

For instance, the authors consider digital HRM as the use of contemporary digital technologies to increase the effectiveness of human resource activities and structure HR services by endowing traditional processes with a serious electronic component emphasizing innovation and supporting decision making.

2. Importance of Digital Human Resource Management

In the digital era, one of the fundamental topics is digital human resource management (DHRM) as a part of organizational digital transformations that have continued to emerge since most organizations utilize the Internet and information communication technology. It is the most important element for increasing organizational efficiency and effectiveness through process development, improving adaptability to changing demands, and achieving objectives. In the HR field, digital transformation reduces reliance on paper documents and traditional administrative exchanges by digitizing employee files, payrolls, and leave requests, which helps attract talent, enhances the organization’s digital image, and improves recruitment performance (Issa & Abdelrazek, 2024: 312).

(Varadaraj and Al Wadi, 2021: 44, Alkhawlani et al., 2018) note that nowadays, in the digital world, the role of DHRM has increased over the traditional form of management because organizations require more effective and flexible work forms that enhance overall performance and respond to the demands of the competitive environment. Digital systems are becoming more popular in organizations to handle their human resources, and HR departments must follow the process and revise internal policies to meet the requirements of the digital era. The effectiveness of organizations is determined by their capability to develop effective internal resources and successfully integrate the latest technologies and business processes to increase competitiveness on local and global scales.

(Aggarwal and Sharon, 2017: 25, Al-Rawi et al., 2021) stress that it all comes down to DHRM’s potential to change the direction of the HR department from administrative (operations oriented) towards being more effective and strategic. With digitization, HR can align outcomes with results, quantitatively measure them, and store them for further use (e.g., decision support). This becomes even more important as organizations advance toward globalization, in which case using digital technologies is becoming necessary to follow the pace of change and reach competitiveness.

(Al-Alawi et al., 2023: 450, Al-Sabaawe et al., 2020) emphasize that DHRM contributes to business continuity in times of crisis, remote work support, bilateral HR communication, and organizational adaptation through recruitment through technical tools in communication and task management. As a result, it becomes the most essential element that ensures high quality performance and continuous active operations.

(Urba et al., 2022: 206, Husien et al., 2019) the relevance of DHRM to the field of engineering management is that it accounts for human capital management and organizations. It also helps in process digitalization and performance improvement, and d is strongly associated with the deformation and restructuring between structure and functions in academia mainly during and after crises; thus it is an elementary element for keeping pace with development and adjusting to modern changes.

The researchers argue that the significance of this topic lies in the need to explain how digital transformation can be used as a tool for enhancing HR performance and work efficiency, which, in turn, boosts reliance on technology in both performing functions and networking within the organization, hence going along with dynamic changes, aiming at realizing institutional excellence.

3. Dimensions of Digital Human Resource Management

The measurement scale developed by(Mia & Faisal, 2020) as applied in the study by (Balani & Hussein, 2023) identifies six dimensions of digital human resource management (DHRM):

B: Second variable (Competitive advantage)

1. Concept of Competitive Advantage

Digital human resource management is one of the main reasons for the development of competitive advantage within organizations under the circumstances of rapid technological changes. It helps to improve the performance and make it more efficient through the use of modern technologies to implement HR functions. A competitive advantage is significant in the fact that an organization is capable of offering added value or a unique product or service, which renders it better and more sustainable than other competitors. This benefit is based on the strategic and technical platforms that enable the fulfillment of customer needs and their satisfaction, which contributes to the improvement of organizational position and survival in the rapidly changing and highly competitive environment (Abdul-Aziz, 2024: 1056).

(Hart and Rodgers, 2024: 2165) stated that competitive advantage is an essential ability of an organization that enables it to achieve perform superior results over its rivals in the same sector by using precious, rare, and unique resources, which cannot be readily substituted.

(Distanont, 2020: 18) argues that competitive advantage enables an organization’s strategy to create long-term competition by combining knowledge and skills in technology, creativity, and development and by introducing new ideas through product innovation, process innovation, or business model innovation. This not only generates positive outcomes for the organization, but also contributes to the growth of the national economy.

(Adewusi et al., 2024: 422) explain that competitive advantage is an organization’s ability to achieve superior and sustainable performance through precise strategic decisions, based on the analysis of historical data, real-time insights, and predictive analytics. This supports a quick response to market change, provides an image of opportunity, reduces risk, and builds flexibility and innovation in a dynamic business environment.

(Darmawan and Grenier, 2021: 76) described competitive advantage as an organizational strength that sets it apart from its rivals. It is a particular way of supplying products or services at high costs compared to competing offerings, including low prices relative to others that offer the same performance or quality levels, and delivering at performance and quality levels that are also greater than expected.

The authors of this study regard competitive advantage as an organization’s remarkable and long -lasting performance that sets it apart from other rival units through unique resource implementations and inventive strategy innovations. This strategy can satisfy customer requirements efficiently and gain advantage in the knowledge economy stage with its reliance on knowledge, technology, and creativity, as well as respond to the change of market at any time, and achieve excellence in a competitive arch environment.

2. Importance of Competitive Advantage

However, aggressive advantage represents its extreme importance as an important factor to support organizations in order to excel their competitors and achieve better performance, such as impelmenting market share and profitability award competitive position of institutional to make organizations more able to maintain growth government business competition (Agustian et al., 2023: 110).

According to (Widodo, 2023: 4) competitive advantage is important because it reflects how efficiently a company uses its strategic resources to achieve high financial performance and beat its competitors. It also significantly contributes to the enhancement of performance of micro, small and medium enterprises by maximizing profitability and enhancing the customer base.

(Djiu et al., 2024: 758) emphasize the role of competitive advantage in allowing a firm to differentiate itself from competing firms by reducing costs or creating something that is perceived as unique and valued by the intended audience. It also plays an important complementary role in improving the productivity of small, medium enterprises and is interrelated to their export potential which is crucial for both profit and growth in the market.

The authors conclude that competitive advantage is important, partly because it enables firms to be profitable in excess of competitors’ profits by providing greater value to (customersinger quality or lower price). It also consolidates the NCC’s position in the competitive market and provides opportunities for ongoing investment and expansion.

3. Dimensions of Competitive Advantage

The study adopts (Porter’s, 1998) framework, as applied in (Obeidat, 2021) which includes the following dimensions:

A. Research design

The research adopted a descriptive analytical design as the appropriate methodological framework for studying the nature of the relationship between variables focusing on analyzing the correlation and impact between two main variables:

The independent variable of digital human resource management and the dependent variable of competitive advantage, a questionnaire was developed consisting of the dimensions of the two main variables with the aim of measuring the level of adoption of digital human resource applications and diagnosing their impact on enhancing the competitive advantage of private banks. The questionnaire was also subjected to scientific review by specialists to ensure the validity and soundness of the tool, and its reliability was tested using Cronbach’s Alpha coefficient.

B. Data collection

The questionnaire was distributed to a sample of 150 leaders in private banks, and their general data included: gender, age, educational qualifications, job or position, and number of years of service. The results of the statistical description showed that most of the sample were male (91%), and the predominant age group was 30–39 years old (40.7%), while most of the respondents had a bachelor’s degree (60.7%). The data also showed that the category of ‘head of department’ was the most represented (64.7%), and that the majority of years of experience ranged between 11 and 20 years.

C. Data analysis

This study has narrowed down on two variables: the first variable is the independent variable, which is Digital Human Resource Management, and the second variable is the dependent variable, Competitive Advantage. This study determines the correlations between these two variables. The experts validated the questionnaire, which included the dimensions of the two variables. The analysis was performed using SPSS virson 27 and AMOS version 24.

Description of the sample

The questionnaires were distributed to a sample of 150 individuals from the leadership of private banks, and their opinions were relied upon to measure both digital human resource management and competitive advantage.

Reliability test

The research relied on the alpha coefficient to determine the level of stability and classified. (Feldt & Brennan, 1989) the values of the reliability coefficient into two groups: those with values above 70 percent are classified as high, whereas those with values below 70 percent are classified as low. Cronbach’s alpha coefficient was computed, as reflected in Table 1 below:

Cronbach’s alpha coefficient was 0.94, compared to the variables of the study, which was greater than 0.7. Thus, it can be supposed that according to Cronbach’s alpha coefficient, the study variables have a high degree of reliability.

Internal consistency

Internal consistency is an important measure to determine the correlation between questionnaire items within a single dimension is called Internal Consistency. This measure can also be used to determine correlations among all items within a single variable. It is calculated by determining the mean of the absolute correlation coefficients between pairs of items within a dimension or variable. A value greater than 0.3 indicates the presence of internal consistency (Wu, M. et al., 2016).

Based on Table 2, it can be seen that the level of internal consistency is the level of the main variable because the value of the absolute mean correlation is 0.324, indicating Digital Human Resource Management, and 0.405, indicating Competitive Advantage, which is greater than 0.3.

Common Method Bias (CMB) test

It is a basic test for acquiring valid and accurate estimations and relationships. According to researchers, this bias may be caused by various sources, such as insufficient variety in the sources of data, agreement of the respondents with the question in any case, concomitant usage of the scale, nonexistence of different Likert measures, similarity or ambiguity of statements, and questionnaire length. The existence of this bias can exaggerate or underestimate correlations between variables, that is the correlation values might be indicative of this extraneous variables instead of the actual relationships, and the results would be inaccurate.

The presence or absence of common method bias was determined using the Harman single factor test. According to (Bagozzi and Yi, 1991) if the value of this test exceeds 50%, it indicates the presence of common method bias. The value of this test was calculated using SPSS, and for the current study data, the value was %CMB = 32.078, which was below 50%. Therefore, it can be concluded that there is no common method bias.

Description and diagnosis of research variables

In this section, the study variables are described in terms of means, standard deviations, percentages, and frequencies for each variable, as shown in Table 3 below:

It is observed from Table 3 above that the variable Digital Human Resource Management achieved a response intensity of 74.683%, a mean of 3.734, and a standard deviation of 0.941. In terms of agreement and disagreement percentages, the overall agreement for Digital Human Resource Management reached 65.35%, disagreement was 9.70%, and 24.95% expressed neutral opinions.

Competitive Advantage recorded a response intensity of 80.722%, mean of 4.036, and standard deviation of 0.937. The overall agreement was 75.98%, disagreement 7.09%, and 16.94%. Comparing the two variables, Competitive Advantage shows a higher response intensity than digital Human Resource Management.

A. Correlation analysis

The correlation coefficient determines the strength and nature of the correlation between the two variables. The sign of the coefficient will be negative or positive, and the value will show the strength of the relationship; the closer the value is to either ±1, the stronger the relationship between the variables. Additionally, the p-value was used to determine the significance of the correlation; when p was less than 0.05, the correlation was considered to be statistically significant.

Main Hypothesis 1: Digital Human Resource Management has a significant correlation with Competitive Advantage. The outcome of the testing of the first main hypothesis is presented in Table 4 below:

Table 4. Correlation between digital human resource management and competitive advantage.

First variable	Relationship direction	Second variable	Correlation value	95% confidence interval		P-value
				Lower	Upper
Digital Human Resource Management		Competitive Advantage	0.96	0.905	1.013	0.002

Digital Human Resource Management and Competitive Advantage have a positive correlation, represented by a correlation coefficient of 0.96. We have a Confidence Interval (CI), which is used to indicate limits of confidence, and the lower and upper limits are 0.905 and 1.013, respectively, at a significance level of 0.05. In addition, the p-value (0.002) is below 0.05, thus demonstrating a statistically significant relationship between Digital Human Resource Management and Competitive Advantage.

From this main hypothesis, the following sub-hypotheses are derived:

Table 5 below shows the results of testing the above hypotheses.

Table 5. Correlation between the dimensions of digital human resource management and competitive advantage.

First variable	Relationship direction	Second variable	Correlation value	95% confidence interval		P-value
				Lower	Upper
Digital Recruitment		Competitive Advantage	0.69	0.520	0.821	0.006
Digital Selection			0.82	0.683	0.917	0.003
Digital Performance Evaluation			0.81	0.624	0.949	0.003
Digital Training and Development			0.74	0.549	0.890	0.004
Digital Compensation Management			0.89	0.890	1.013	0.002
Digital Learning			0.99	0.935	1.058	0.001

From Table 5 above, it is observed that all dimensions of Digital Human Resource Management showed a positive relationship with Competitive Advantage, as indicated by the positive correlation coefficients. The correlation values for the dimensions (Digital Recruitment, Digital Selection, Digital Performance Evaluation, Digital Training and Development, Digital Compensation Management, Digital Learning) were 0.99, 0.89, 0.74, 0.81, 0.82, 0.69, respectively. All dimensions were statistically significant, with p-values of < 0.05. Additionally, the confidence intervals for these dimensions showed consistent signs, indicating the significance of their correlation.

Main Hypothesis 2: Digital Human Resource Management has a statistically significant effect on Competitive Advantage.

Table 6 below presents the results of Hypothesis 2:

Table 6. Results of the effect of digital human resource management on competitive advantage.

Independent variable	Effect direction	Dependent variable	Regression coefficient estimate (β)	Standard error of regression coefficient (Se. β)	95% confidence interval		P-value
					Lower	Upper
Digital Human Resource Management		Competitive Advantage	0.949	0.161	0.656	1.304	0.002

The effect of Digital Human Resource Management on Competitive Advantage is demonstrated through the estimated coefficient for Digital Human Resource Management, which reaches (0.949), indicating a positive relationship between Digital Human Resource Management and Competitive Advantage, as reflected by the positive sign of this estimated coefficient. The standard error (S.E.) is (0.161). Furthermore, the effect of Digital Human Resource Management on Competitive Advantage was statistically significant, as the p-value (0.002) was less than (0.05). The 95% confidence interval showed consistent signs, with lower and upper bounds being (0.656 and 1.304), respectively. Based on these results, the alternative hypothesis that Digital Human Resource Management has an effect on Competitive Advantage can be accepted.

The following sub-hypotheses were derived from this hypothesis:

Table 7 below presents the results of testing the above hypotheses:

Table 7. Results of the effect of digital human resource management dimensions on competitive advantage.

Independent variable	Direction of effect	Dependent variable	Regression coefficient estimate (β)	Standard error of regression coefficient Se. (β)	95% confidence interval		P-value
					Lower	Upper
Digital Recruitment		Competitive Advantage	0.552	0.128	0.346	0.834	0.003
Digital Selection			0.682	0.135	0.446	0.968	0.003
Digital Performance Evaluation			0.666	0.145	0.407	0.972	0.002
Digital Training and Development			0.669	0.157	0.419	1.026	0.003
Digital Compensation Management			0.887	0.170	0.607	1.296	0.001
Digital Learning			1.003	0.176	0.732	1.430	0.002

From Table 7 above, it is observed that all dimensions of the Digital Human Resource Management variable exhibited a positive relationship with the Competitive Advantage variable, as indicated by the positive signs of the estimated coefficients. The estimated coefficient values for the dimensions (Digital Recruitment, Digital Selection, Digital Performance Evaluation, Digital Training and Development, Digital Compensation Management, Digital Learning) were (1.003, 0.887, 0.669, 0.666, 0.682 and 0.552) respectively. All dimensions of the Digital Human Resource Management variable were statistically significant, as their corresponding p-values were less than 0.05. Moreover, the confidence intervals for the Digital Human Resource Management dimensions displayed consistent signs, indicating the statistical significance of these dimensions.

Recommendations

Banks should focus on developing competitive advantage supported by digital human resource management applications. Research findings can be relied upon to make strategic decisions while maintaining the reliability of measurement tools in future studies. It is advisable to invest in digital infrastructure for human resource management and adopt comprehensive digital programmes for all dimensions to ensure improved competitiveness, and integrating digital human resource management as a strategic tool for improving performance, while periodically monitoring development and measuring its impact.

Reporting guidelines

This study is an observational survey-based research and follows the STROBE reporting guidelines. No CONSORT or ARRIVE checklists are required as the study does not involve clinical trials or animal experiments.