Purpose: Utilizing the Social Cognitive Theory framework, this research aims to illuminate how self-efficacy acts as a mediating factor, enhancing employability among working university students by fostering essential capabilities in digital leadership and intercultural competence. Design/methodology/approach: Quantitative study with 206 working undergraduates from an Indonesian university. Questionnaires and structural equation modeling (SEM) with SPSS and SmartPLS were used. Findings: Findings showed that working undergraduate students possess a high level of digital leadership capability and intercultural competence and tend to display increased confidence in their ability to perform challenging tasks and attain anticipated outcomes, thereby enhancing their employability. The integration of these skills, coupled with a solid self-efficacy belief, emerges as a powerful combination in the modern employment landscape in the digital transformation and Artificial Intelligence age. Research limitations/implications: This research is conducted in one university in Indonesia, potentially limiting its generalizability. Future studies could expand its regions to multiple universities across different countries for a more comprehensive implication. Practical implications: This research answered the call for strategies from the university level on enhancing the development of essential competencies for working undergraduate students’ employability. It further highlights the necessity for shaping the curriculum to prioritize digital leadership capability, intercultural competence, and the cultivation of self-efficacy among working students. Social implications: This insight of the research has profound social implications, indicating that educational institutions must adapt their curricula to prioritize these competencies. By doing so, universities can better prepare students to navigate the complexities of the modern workplace, thereby contributing to a workforce that is not only technologically proficient but also culturally adept and resilient in the face of challenges. This adaptation is essential for fostering a generation of graduates who are well-equipped to contribute positively to a diverse and rapidly evolving labor market, ultimately benefiting both the individuals and the wider society by promoting economic development and cultural understanding. Originality/value: Adopting a quantitative approach, this research offers a data-driven lens of employability determinants, deepening the understanding of how intertwined competencies shape employment outcomes in the AI age. © 2024, Emerald Publishing Limited.
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