Employers urged to have transparent pay conversations with staff
Employees are getting misinformation about pay expectations as they source the information from generative AI and social media platforms.
This is according to a new report from Payscale, which polled 1,000 employees in the US and 500 business leaders, including HR managers, who are responsible for compensation decision-making.
It found that 70% of employers have seen an increase in employees using generative AI, such as ChatGPT, for salary information.
As a result, more than a third of employers said employee expectations around salaries are higher than ever before (38%) and that employees are receiving conflicting information about their pay (35%).
Going online for pay info
Aside from generative AI, 72% of employers also said there had been an increase in employees negotiating salaries based on information they found online.
In fact, 63% said there has been an increase in employees coming to them with salary requests based on inaccurate or unverified data.
This was information confirmed by employees, as some of them said they got their salary information from social media (19%), search engines (26%), and similar job postings (36%).
Ruth Thomas, chief compensation strategist at Payscale, said their findings indicate that employees' ways to educate themselves on their pay are expanding.
"Employees are still gaining knowledge from traditional sources like family and friends and industry salary guides, but AI and social media are driving up salary expectations without the verified data and role context needed to inform compensation," Thomas said in a statement.
The consequence of pay misinformation is turnover, according to the findings, as 66% of employees said they considered leaving their job if a salary-related conversation went badly.
Nearly half (48%) of employers also reported an increase in employee turnover as a result of salary-related conflicts in the past year.
Pay confidence gap
Employees are searching for information online amid a pay confidence gap in workplaces.
According to the report, 93% of employers believe their employees trust their pay decisions, but only 69% of employees trust their employer's decisions on pay.
A further 41% of employees even said they have never had a transparent discussion with their employer about how their pay is determined.
"In the face of mounting misinformation, too many employers aren't having the right conversations with their employees about pay," Thomas said.
"It's critical they develop compensation strategies that are rooted in transparency, driven by data, and ensure compensation decisions are communicated clearly to improve pay confidence among employees."
The findings come as pay transparency laws gain traction across the world, with the European Union adopting related legislation.
