Digital transformation, management efficiency and excess employees − evidence from Chinese listed firms

Abstract

Purpose The purpose of this study is to explore the relationship between digital transformation and excess employees. This research investigates the questions of when human−machine synergy can be achieved after a firm goes through digital transformation and whether there will be excess employees in the interim. Design/methodology/approach This paper takes A-share listed companies as research object in the period of 2011−2020 and a total of 24,718 samples are obtained. Hypothesis testing and regression analysis are performed in STATA. Findings This paper finds a human−machine mismatch in the short term, as evidenced by an increase in the rate of excess employees; however, with the progress of digital transformation, it can drive the achievement of human−machine synergy in the long term, and management efficiency plays a mediating role in this process. Further research showed that the effects of digital transformation on the number of employees, revenue generation per capita and profit generation per capita varied in both the short and long term. In addition, the characteristics of the company affect the relationship between digital transformation and excess employees. Originality/value This paper contributes to the understanding of the impacts of digital transformation on the human capital structure of companies at a micro level. It also provides insights into how to improve human capital demand structure through digitalization, thus providing insights into labor market changes.