Human Resource (HR) analytics is increasingly recognized as a strategic tool for achieving competitive advantage, yet its adoption in Malaysia remains relatively sluggish. Although prior studies have established a link between HR analytics and firm performance, they often fail to explain the underlying mechanisms, particularly how HR analytics enhances outcomes step by step through talent management. To address this gap, this study aims to examine the facilitators and inhibitors of HR analytics adoption in Malaysian firms and explores its impact on talent management and operational performance.
A quantitative research design was employed, utilizing survey questionnaires collected from 154 firm-level respondents. The data was analysed using SPSS and SmartPLS to test an integrated framework grounded in the factor approach (embedded within Technology–Organization–Environment [TOE] Framework) and Dynamic Capabilities Theory.
The findings show that compatibility and top management support facilitate HR analytics adoption, while perceived cost and risk inhibit it. Surprisingly, complexity and competitive pressure were not significant. Among the TOE contexts, the organizational context proved more influential than technological and environmental factors. Moreover, HR analytics adoption was found to enhance talent acquisition, development and retention, which in turn positively influenced operational performance.
This study develops a parsimonious framework that incorporates both facilitators and inhibitors of HR analytics adoption, offering a more balanced view. Second, it extends the literature by examining how HR analytics adoption influences operational performance through talent management, providing insights for organizations to strengthen outcomes via data-driven practices.
