Digital Transformation and Employee Adaptability: Investigating the Role of Organizational Support in Nigerian Small and Medium Enterprises (SMEs)

Abstract: This study examined the effect of digital transformation on employee adaptability, with organizational support as a mediating factor in Nigerian SMEs. Using a descriptive survey design, data were collected from a sample of 399 SMEs drawn from a population of 149,326 enterprises across Southwest Nigeria, determined using Yamane’s (1967) formula. A multi-stage sampling technique was employed, and data were obtained through structured questionnaires administered both physically and online. Descriptive statistics summarized respondents’ biodata, while Structural Equation Modeling (SEM) was applied to test four hypotheses at a 5% significance level. Findings revealed that digital transformation had a positive but insignificant effect on employee adaptability (β = 0.214, C.R. = 1.81, p = 0.07), suggesting that technological initiatives alone do not directly enhance adaptability without additional support mechanisms. Conversely, organizational support exhibited a positive and significant effect on employee adaptability (β = 0.392, C.R. = 3.84, p < 0.001), highlighting the importance of resources, training, and managerial guidance. Results further showed that digital transformation significantly enhanced organizational support (β = 0.467, C.R. = 3.86, p < 0.001), while mediation analysis confirmed a significant indirect effect of digital transformation on adaptability through organizational support (β = 0.183, C.R. = 2.73, p = 0.006). The study concludes that organizational support serves as the critical channel through which digital transformation drives adaptability, and recommends that SME leaders integrate structured support systems such as training programs, mentorship, and IT support into digital initiatives.