Building an AI-ready workforce: How knowledge integration transforms human capital investments into organizational adaptability

Organizations continue to invest heavily in artificial intelligence (AI) technologies and workforce development initiatives, yet limited research explains how workforce capabilities contribute to organizational adaptability in AI-enabled environments. Drawing on Human Capital Theory and Organizational Learning Theory, this study examines how human capital investment influences organizational adaptability through AI workforce readiness and knowledge integration, while considering the moderating role of organizational learning climate. A quantitative cross-sectional survey was conducted among 426 employees and managers in Canadian organizations that had implemented or were actively exploring AI technologies. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4, including reliability, validity, mediation, moderation, and predictive assessments using bootstrapping with 5,000 resamples and PLSpredict analysis. Human capital investment significantly enhanced AI workforce readiness, which improved knowledge integration and organizational adaptability. Knowledge integration mediated the relationship between AI workforce readiness and organizational adaptability and, together with AI workforce readiness, formed a serial mediation pathway linking human capital investment to organizational adaptability. Organizational learning climate strengthened the positive effect of knowledge integration on adaptability. This study advances knowledge management research by positioning AI workforce readiness as a strategic capability that enables the integration of human expertise and AI-generated insights. The findings demonstrate how workforce development investments are transformed into adaptive organizational capabilities through knowledge integration and supportive learning environments, extending understanding of organizational adaptability in AI-enabled contexts. (199 words). Keywords: Artificial Intelligence Workforce Readiness, Human Capital Investment, Knowledge Integration, Organizational Adaptability, Organizational Learning Climate.