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So far, organizations are more likely to license general-purpose AI tools than compensation-specific ones to help with pay benchmarking.
The use of artificial intelligence is spreading throughout almost the full range of corporate activities, but the level of trust varies. One area that has much room for growth in that regard is compensation management.
Even Payscale, a provider of AI tools for that purpose, acknowledges as much based on its own research.
In the company’s recent survey that garnered 3,413 responses (three-quarters of them from executives and managers), 42% said they use free or personal licenses for general-purpose AI tools such as ChatGPT and Gemini, while 38% said they have purchased enterprise licenses for such tools.
However, only 16% have purchased a new HR or compensation tool primarily for its AI capabilities, and just 15% have adopted AI-powered features in existing tools or evaluated tools specifically for their AI capabilities.
About a quarter (22%) of survey respondents said they trust general-purpose AI tools such as ChatGPT and Gemini to support compensation benchmarking. But slightly more (28%) said they are hesitant to use AI for any compensation decisions, while 16% said they are unsure about or have no experience using AI for such benchmarking, and 14% said they don’t currently use or flat-out don’t trust AI for that purpose.
Notably, almost half of those polled (44%) said it was merely curiosity or a personal interest that motivated them to try AI-powered tools for compensation management or other HR-related tasks.
About one in five (21%) said they trust compensation-specific AI tools, provided they have adequate methodologies and controls.
“Overall, this suggests that the market is guarded about the use of AI when the context is critical business functions rather than exploration for personal tasks,” Payscale wrote in its survey report.
The top risk associated with AI/automated compensation decisions was a reduction in human judgment and context stemming from over-reliance on the tools, according to the research. That was followed by data privacy and security concerns and the risk of perpetuating biases if AI models are not properly audited.
Among those who said they do trust AI for compensation decisions, the top factors that influence such confidence were, by far, transparency in how the AI generates results and the accuracy of outputs compared to internal or known benchmarks. Both were cited by 57% of survey participants as being among their top three influences.
According to Payscale, when properly employed, AI can help organizations make faster, more informed decisions. It can write job descriptions, identify pay equity gaps, improve market benchmarking, support skills-based pay and automate time-consuming processes like survey participation, pay-increase recommendations and reporting.
Some other selected survey results:
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