What Every HR Leader Needs to Know About AI & People Analytics: Dr. Fermin Diez

💡 Episode Key Insights

• What Drives Dr. Diez’s Passion for HR: [01:55]: Dr. Diez reflects on his journey in HR, the evolution of the field, and the frustrations that fuel his dedication to driving progress.

• Breaking the Fear of Numbers in HR: [04:53] Why HR leaders must embrace data, analytics, and technology, and how storytelling can make technical concepts accessible to all.

• From Analytics to Action: Real-Life Impact Stories: [12:40] A powerful case study on linking employee engagement, customer satisfaction, and profitability, and why challenging assumptions is critical for HR success.

• The Role of HR in Strategic Business Decisions: [48:00] Why HR must focus on productivity, not just engagement, and how to position the function as a key driver of organizational success.

• The Power of Culture in a Hybrid Workplace: [41:12] Insights on building strong, inclusive cultures that integrate full-time, part-time, and AI-augmented teams.

• The Future of HR and AI Adoption: [27:00] Practical tips for HR leaders on leveraging AI for recruiting, onboarding, and decision-making, plus guidance on navigating the challenges AI brings.

• Leadership Wisdom and Productivity Hacks: [09:11] Dr. Diez’s personal productivity strategies, including curiosity, discipline, and preparing for marathons—both literal and professional.

The Key to Unlocking HR’s Strategic Potential

Dr. Diez emphasizes that while HR has traditionally excelled at tracking metrics like engagement and turnover, these measures are often treated as ends in themselves. Instead, HR leaders must demonstrate how these metrics link to tangible business outcomes, such as profitability and productivity.

Example from Fermin’s Experience:
In a consulting project for a bank in Australia, Dr. Diez analyzed HR policies and their impact on branch profitability. Surprisingly, the data revealed that some assumptions—like higher bonuses or diverse MBTI profiles—had no measurable effect on performance. Instead, metrics like controlled turnover (13–15%) and balanced full-time to part-time staff ratios were critical to profitability.

Practical Advice:
    •    Don’t assume common HR practices are universally effective—test them against business outcomes.
    •    Use people analytics to uncover actionable insights that help refine policies and measure their real impact.

AI: The Game-Changer for HR

AI is reshaping the HR landscape by automating tasks, enhancing decision-making, and offering predictive insights. However, many HR leaders struggle to identify where to start.

Example from Fermin’s Perspective:
Dr. Diez recommends starting small by integrating AI into specific processes, such as recruitment or onboarding. For example, chatbots can streamline onboarding by answering employee queries in real-time, while predictive analytics can identify turnover risks before they become a problem.

Practical Advice:
    •    For individuals: Experiment with tools like ChatGPT for drafting HR policies or writing performance reviews.
    •    For teams: Pilot AI-powered platforms for specific HR processes, such as candidate screening or employee surveys.
    •    For organizations: Leverage existing tools like EngageRocket’s AI-powered features to gain insights into engagement and performance.

Building the Workplace of the Future

The workforce is evolving to include a mix of full-time employees, gig workers, and AI-driven systems. HR leaders must adapt by fostering a culture that unifies this diversity while staying flexible to emerging trends.

Example from Fermin’s Insights:
Dr. Diez highlights the importance of flexible work arrangements, drawing on examples like his daughter, a digital nomad who works remotely across different countries. He stresses that HR must design systems that accommodate such diversity without sacrificing organizational culture.

Practical Advice:
    •    Create purpose-driven cultures that unify employees across different roles and geographies.
    •    Rethink compensation strategies to ensure consistency across full-time, part-time, and gig workers, such as aligning bonus structures for all contributors.
    •    Invest in leadership training to help managers lead hybrid or remote teams effectively.

Why This Matters Now

The stakes for HR leaders have never been higher. CEOs and boards increasingly view AI and people analytics as tools to drive productivity and reduce costs, but this shift also creates challenges for HR to navigate.

Example from Fermin’s Perspective:
Dr. Diez explains that while AI can augment human efforts, it also raises concerns about workforce reduction. HR leaders must proactively manage these transitions by developing workforce strategies that integrate humans and technology.

Practical Advice:
    •    Engage in future workforce planning that accounts for automation, gig work, and hybrid roles.
    •    Shift the HR function’s focus from engagement alone to productivity and profitability, aligning HR goals with business objectives.
    •    Be the change management agent within your organization, ensuring employees understand and adapt to AI’s role in the workplace.

"Most analytics in organizations track turnover and engagement. What the business really wants to know is how turnover and engagement affect business outcomes.” — Dr. Fermin Diez

Related Resources

• Read Dr. Fermin Diez’s blog: Fermindiez.com

• Connect with Fermin Diez

• Connect with Dorothy Yiu

• Join the HR Impact community: Sign Up

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MEET OUR GUEST

Dr. Fermin Diez

Fermin Diez is a globally renowned HR strategist and thought leader with over 35 years of experience across 40 countries, having served as Regional Head of HR for global MNCs and driving transformative people strategies. He is the co-author of influential books, including ‘Human Capital and Global Business Strategy’, 'The Remuneration Handbook' and ‘Fundamentals of HR Analytics’. Currently focused on strengthening Singapore’s social service sector, Fermin continues to shape the HR profession through his teaching, speaking, and advisory roles.