Agile human resource strategy and leadership for innovation performance in the digital era

Orientation: Indonesia’s automotive industry faces technological disruption and global competition, pushing organisations to adopt agile human resource management (HRM) and leadership practices to sustain innovation performance (IP). Research purpose: This study tests the effects of agile HR strategy (AHRS) and agile leadership (AL) on IP, with digital readiness (DR) as a mediator and agile culture as a moderator. Motivation for the study: Evidence on how agile and digital transformation jointly shape IP in emerging markets is still limited. This study responds by examining Indonesia’s automotive sector. Research approach/design and method: A quantitative cross-sectional survey of 230 professionals in major automotive firms in West Java was analysed using partial least squares structural equation modelling (PLS-SEM) to estimate direct, indirect and moderating effects. Main findings: Agile HR strategy and AL significantly improved IP, both directly and via DR. Digital readiness was the strongest predictor. Agile culture did not significantly moderate the relationships, suggesting a foundational rather than contingent role. Practical/managerial implications: Firms should strengthen adaptive HR practices and leadership development that support empowerment, collaboration and digital vision, alongside investments in infrastructure, employee competence and process integration to convert agility into sustained IP. Contribution/value-add: The study extends dynamic capabilities and the resource-based view by integrating agile HR, leadership and DR in an emerging-market context, offering actionable insights for managers and policymakers aiming to enhance competitiveness and digital transformation.