Using AI In HR Departments: What Does The Future Hold?

How AI Can Be Used In HR For Compensation Planning

Love it or hate it, consumer-level AI is here to stay, and it’s affecting almost every industry in some way or another. The HR field is no exception; we’ve seen some major changes occurring as more consumers get comfortable with AI and more AI solutions emerge on the market.

In some cases, however—such as when you’re trying to develop a compensation strategy within your business—these changes have only muddied the waters. On one hand, you might be wondering if you can use AI to help build a job structure or do salary research in place of hiring an outside consultant. But you might also be wondering about the technology’s limits—where does it fall short of human capabilities?

Our team of compensation specialists would say you can use AI in your job, but it’s important to be aware of its limitations. Here’s what you need to know before you boot up ChatGPT or an HR-specific derivative for help in compensation planning.

AI can offer an almost instantaneous snapshot of market data.

Never before has it been so easy to ask, “What’s the average salary for [X job position] in [city]?” and have your question answered instantly.

This can certainly help you as you build out a framework for job duties, titles, and compensation. What might have taken you hours to research could now take only seconds—if you trust the results (which is an issue we will discuss later).

Just keep in mind as you research that if you can do it, so can your employees and job candidates.

Whereas a job seeker in the past might have come across a listing offering $40,000–$60,000 for a given position and simply sent in an application, today’s candidates are doing market research to find out if jobs provide fair compensation before they even apply.

This effect is compounded once an employee lands the job. Companies can be certain their workers are using Chat-GPT to find their salaries and see AI-generated market comparisons on a regular basis.

This unprecedented access to data means employees have more questions for their leaders than ever before.

Employees may once have been satisfied with the cursory answers given by their company leaders when they asked why their position was compensated in a certain way.

But now, these employees are marching into their leaders’ offices armed with data and wanting to know the reason behind the discrepancies they’ve found.

This means HR professionals and company leaders must be prepared at all times to field unexpected questions about salaries, benefits, and job descriptions. (If this is something you or your managers routinely struggle with, check out our CompAware program.)

The trouble is AI might not be as accurate as most people think.

Consumer AI has several limitations the average user isn’t aware of. For one thing, an AI model is only as accurate as the data set it’s been fed. If a data set is outdated, biased, or skewed in any way, the answers you’ll gain from an AI algorithm can be way off.

For another, AI is already gaining a reputation for making facts up on the fly and citing sources that don’t support what the AI claims.

This means not only are HR professionals and managers being bombarded with tricky questions from employees, but they’re also being asked questions based on data that may or may not have any basis in reality. This can be extremely difficult to explain to someone when you’re put on the spot, and it’s one reason we recommend hiring an HR consultant if this is a recurring issue in your workplace.

Even when the data is accurate, AI lacks the human touch.

Baked into the title of Human Resources is the fact that HR is supposed to be a reliable resource for humans to get help from other humans.

AI excels at giving employees the data and background information they need in order to have productive conversations, but it can’t take the place of HR or managers when it’s time actually to have those conversations. We’re a long way off from employees being able to have satisfactory interactions with chatbots to resolve their workplace questions.

Someone could certainly ask an AI bot why they’re being compensated a certain way and receive a dry, technical answer. But bots are incapable of understanding the person’s emotions, adjusting course based on nuances in the conversation, or prompting the person to share how they’re feeling about the situation.

A human HR professional, on the other hand, could do all of these things and make the employees feel as if they have a real say in the company and the trajectory of their careers.

This human touch is priceless and, for the time being, irreplaceable.

So, how can you safely use AI in your HR duties?

The ability of AI to scrape enormous amounts of information from resources around the world means AI does have an edge when it comes to data gathering and analysis.

For now, we would say feel free to use AI as a tool for collecting market data and analyzing the differences between job titles.

You can expect your employees to be doing the same, so it’s a good idea to know what data they’re looking at. Just be aware that the results you see might not be as accurate as what you’d receive from a professional HR firm that relies on survey houses for a more complete picture of market information.

As far as using AI to advise you on how to have compensation conversations with employees, we’d recommend you steer clear.

AI can’t coach your staff nearly as well as you can, and you’d never be entirely sure that everyone leaves the conversation on the same page. If you’re running into trouble having these conversations yourself, it’s far better to ask for support from human consultants.

For (human-driven) problem-solving and compensation consulting, contact MorganHR.

There’s something so cold and impersonal about asking an AI bot for HR help. How could a computer system help you understand how your employees are feeling, address their concerns, and keep your workplace operating smoothly alongside the desires and sentiments of your staff?

Simply put, it couldn’t.

When you need help with your HR compensation strategies, there’s no substitute for human experts with a proven track record of having solved those very same business problems before.

We’re not averse to modern technology; in fact, we like to stay on the cutting edge of HR software development. Just ask our satisfied customers for some examples of how we use the data processing strengths of automation coupled with our own expertise and creativity to help our clients achieve the best of both worlds.

Schedule a call to get started.