Prioritisation of Human Resource Strategies in the Digital Transformation Process of SMEs

This chapter focuses on the importance of human resource (HR) management strategies in the digital business strategy for small- and medium-sized enterprises (SMEs). With the increasing influence of digital transformation that alters organisational structures and implements new technologies, SMEs have no other choice but to evolve. However, due to the scarcity of resources, it becomes very important for SMEs to allocate its HR appropriately and effectively. To support decision-making on strategies like employee reskilling, recruitment of digital talent, leadership development, and promoting a digital culture, this chapter presents a multi-criteria decision analysis (MCDA) framework. The prioritisation is crucial because not all the strategies can be executed at once, and SMEs should target the most effective ones in the long run, affordable, and relevant to their digital transformation agenda. This chapter illustrates methods for how SMEs can use the proposed prioritisation framework effectively. The hypothetical case study demonstrates the real challenges faced by SMEs during digital transformation and how MCDA assists leaders in selecting the most beneficial HR strategies. The case highlights the necessity of fitting strategies to organisational challenges to allow the customisation of training and leadership to align with business demands and maximise effectiveness while minimising costs. Upon use, this framework enables SMEs to comprehend and direct their digital transformation path more effectively.