Activating Digital Talent Ecosystems for Operational Innovation: The Roles of Employee Agility and Digital Leadership

Abstract

The rapid digital transformation of public administration requires organisations to recalibrate strategic talent management to drive operational innovation. Grounded in Socio-Technical Systems Theory and the Dynamic Capabilities View, this study investigates how digitalised talent management practices influence operational innovation through employee agility and examines whether digital leadership moderates the relationships between digital talent management practices and employee agility. Utilising a quantitative cross-sectional design, primary data from 412 UAE federal government employees were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The structural results indicate that digital talent identification (β= 0.231, p < 0.001), continuous reskilling (β = 0.284, p < 0.001), and AI-augmented engagement (β = 0.215, p < 0.001) significantly drive employee agility, which subsequently exerts a strong direct effect on operational innovation (β = 0.462, p < 0.001). Together, the predictors explain 61.4% of the variance in employee agility (R2 = 0.614) and 58.7% of the variance in operational innovation (R2 = 0.587). Furthermore, digital leadership significantly and positively moderated the relationships between digital talent management practices and employee agility. These findings provide public sector leaders with an empirically validated model for converting digital HR infrastructure into agile workforce behaviour and sustained operational innovation.