Digital Transformation and Performance of Human Resource Function in State Corporations in Nairobi County, Kenya.

Abstract

Digital transformation, the integration of digital technologies into organizational processes to enhance efficiency, innovation and value creation, is increasingly repositioning the human resource (HR) function from an administrative unit into a strategic driver of organizational performance. In Kenya, state corporations have progressively adopted human resource information systems (HRIS) and e-HRM platforms to enhance accountability and service delivery; however, over 30% of public institutions still experience inefficiencies in HR processes such as delayed recruitment, payroll errors and low productivity, while less than 40% utilize HR analytics effectively. Therefore, the purpose of this study was to establish the influence of digital transformation on the performance of the HR function in state corporations in Nairobi County, Kenya. It specifically examined the influence of strategic leadership, HR technology ecosystem, data analytics infrastructure and workforce digital literacy on the performance of the HR function. The study was anchored on the Transformational Leadership Theory, the Resource-Based View, the Dynamic Capabilities Theory and the Technology Acceptance Model. A descriptive correlational research design was adopted, targeting 170 state corporations headquartered in Nairobi County, from which a sample of 119 was determined using Nassiuma's formula and selected through stratified random sampling, with HR managers, HR officers and administrative staff involved in HR operations as respondents. Primary data were collected using a structured questionnaire administered online. Both descriptive and inferential statistical methods, namely Pearson correlation and multiple regression analysis, were used to analyse the data, which were presented in tables and discussed. The findings revealed that the four digital transformation dimensions jointly explained 48.9% of the variation in the performance of the HR function (F = 15.5063, p < 0.05). The HR technology ecosystem had the strongest positive and significant influence on HR function performance, followed by data analytics infrastructure and strategic leadership, while workforce digital literacy had a positive and significant but comparatively weaker influence. The study, therefore, recommends that state corporations should strengthen strategic leadership by improving vision clarity, communication of digital transformation goals and resource allocation; upgrade and fully integrate HR systems tailored to institutional needs; strengthen HR analytics capability, data quality governance and system integration; and intensify continuous digital skills development focused on employee confidence, advanced system proficiency and consistent technology adoption.