Impact of human resource analytics on firm performance: A mediation analysis

Background The integration of human resource (HR) analytics into retail operations enhances firm performance by fostering organizational agility and improving operational efficiency. However, limited research explores how HR analytics drives firm performance in the retail sector, particularly through mediating mechanisms. Objective This study examines the impact of HR analytics on firm performance in the retail sector, focusing on the mediating roles of organizational agility and operational performance. Grounded in the dynamic capability view (DCV) theory, it aims to provide empirical evidence on how HR analytics contributes to business success. Methods Data were collected from 153 HR managers in the Indian retail sector. The proposed model was tested using partial least squares structural equation modeling (PLS-SEM) via SmartPLS 4.0. Results Findings reveal that HR analytics significantly impacts organizational agility, operational performance, and firm performance. Organizational agility positively influences operational performance and firm performance. Furthermore, both organizational agility and operational performance partially mediate the relationship between HR analytics and firm performance. Implications The study highlights HR analytics as a critical driver of organizational agility and operational performance, offering valuable insights for retail managers to optimize workforce strategies. It underscores the need for data-driven HR practices to enhance firm agility and performance in a competitive retail landscape. Future research should explore additional mediators and industry contexts to extend these findings.