THE FINANCIAL IMPLICATIONS OF ARTIFICIAL INTELLIGENCE INTEGRATION IN HUMAN RESOURCE MANAGEMENT: A STUDY OF MALAYSIA’S MANUFACTURING SECTOR

Abstract

This research investigates the relationship between the financial implications of implementing Artificial Intelligence (AI) in Human Resource Management (HRM). As organisations' operational costs continue to increase with challenging workforce management, AI becomes a transformative solution to streamline HR processes, reduce dependency on manual processes, and enhance cost efficiency. This research aims to explore how AI technologies can be effectively utilised to automate key HR functions such as talent acquisition, payroll administration, performance management, learning and development, thereby enabling better resource allocation and productivity.  Grounded in theoretical frameworks including the Technology Acceptance Model (TAM), Resource-Based View (RBV), and Cost-Benefit Analysis (CBA), this research evaluates the perceived usefulness, strategic value, and return on investment of AI in HR. A mixed-methods approach is adopted, combining quantitative surveys and secondary data analysis with qualitative interviews to provide a comprehensive perspective on AI adoption outcomes. The findings are expected to offer actionable insights into the implementation strategies, benefits, and challenges of using AI in HR, especially in the context of the Malaysian manufacturing sector. The study aims to support HR decision-makers in adopting data-driven, cost-effective solutions that promote strategic agility. Ultimately, this research contributes to the broader understanding of digital transformation in HR and underscores the potential of AI to improve financial performance, operational efficiency, and long-term organisational sustainability.