Don't make this AI mistake in salary negotiations, says HR expert: 'You still have to do your homework'

With the growing use of AI in the workplace, employees are now turning to artificial intelligence as a tool for salary research, according to a recent report from Payscale.

The report found that 70% of employers saw an increase in employees referencing information they sourced from AI tools like ChatGPT during salary negotiations, based on a survey of 1,000 U.S. workers and 500 business leaders and HR professionals.

According to Jessica Pillow, the global head of total rewards at HR platform Deel, the question of whether to use AI for salary information comes up "all the time" in her work.

In fact, she's tried it out herself: Pillow says that when she was originally introduced to ChatGPT, the first prompt she entered was to ask the typical salary for someone in her industry.

"Everybody is doing this," she says.

In many cases, Pillow says, AI can be a useful tool to help job seekers, particularly those early in their careers, to determine a "starting point" for salaries in their field.

However, professionals shouldn't view AI-generated pay information as the "absolute truth," at least without thoroughly fact-checking the results, she says.

According to the Payscale report, 63% of employers saw an increase in employees basing their salary requests on inaccurate or unverified data this year.

Using incorrect pay information can put employees in a situation where their expectations aren't "actually aligned to the reality of that company," Pillow says, which can set them up for disappointment.

The number one mistake people make when using AI to source salary information is using overly generic prompts, Pillow says.

"If your prompt isn't very specific, when you're thinking about location, company, size, or like a specific industry, you're going to get an answer that is just maybe not grounded in reality," she says.

According to Pillow, a strong prompt would include the location and size of the company and the level of experience required, as well as any information about benefits and potential bonuses.

For example, instead of a simple ask like "What's the salary for a data analyst?" Pillow recommends a more detailed prompt like the following:

What is the median salary range for a data analyst in marketing in New York City, for a 100-person private company in an advertising agency? The role requires five years of experience. Include an outline of typical forms of variable compensation, their targets and other ancillary items such as stock.

Keep in mind that "every company's approach to compensation is going to be very different," Pillow says: for instance, salaries can vary widely between a role based in Silicon Valley versus a similar job located in a rural area.

Even the most airtight AI prompt won't guarantee accurate information, so Pillow recommends cross-referencing your results with career websites like Glassdoor or LinkedIn.

"It's not the final answer," she says. "You still have to do your homework."

On the bright side, using AI can be a boon for employees who are intimidated by salary negotiations, Pillow says: it can help "prep you so you're not nervous when you're having it, and you're showing up thoughtful and informed."

"The more thoughtful you are about it, the easier the conversation is that you're going to have when you're talking to a recruiter or hiring manager," Pillow continues.

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