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Companies are using AI in human resources to bolster their employee compensation strategies.
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AI can help analyze compensation data across markets, which is useful for pricing new and rare roles.
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This article is part of “Culture of Innovation,” a series on how businesses can prompt better ideas.
With the help of AI, some companies are bringing more structure and strategy to how they compensate employees.
A 2025 survey from Korn Ferry found that roughly a quarter of the 5,717 companies they surveyed are using AI to help determine compensation. Though just 22% of surveyed companies said they are using AI for external-pay benchmarking, 63% say they are considering using it.
Ruth Thomas, the chief compensation strategist at the software company Payscale, said that when companies use AI to analyze large amounts of compensation-related data, it can help promote pay transparency and provide HR teams with an additional tool for understanding new and changing job markets.
At the same time, human resources workers should still audit and monitor AI-driven data tools to keep confidential information safe and avoid data errors that can lead to pay bias, said Gord Frost, the global rewards solution leader at global consulting firm Mercer.
At Payscale, the company uses a combination of AI modeling and HR-contributed salary data to help its customers price jobs, Thomas said.
The tool that does this, Payscale Verse, is especially useful when data is limited because a job is new to an industry or has rare requirements for its location, company size, education, or experience level, Thomas said.
“Sometimes our jobs are really niche, and we have a hard time finding matches for them,” said Kristen Damerow, an HR analyst at SmithGroup, an architectural firm that uses Payscale’s services.
There’s also Payscale Peer, a dataset built from salary information that includes compensation data from more than 5,400 organizations, Thomas said. This data is pulled daily from human resource information systems, or software platforms that help companies manage their operations. It’s 100% employer-reported, which is different from job-posting data that other compensation vendors use, she added.
Peer can show Payscale users what the market is paying for certain roles now, as opposed to purchasing a salary survey from a survey provider, where the information can be outdated. Thomas said if a compensation manager is trying to set a salary for a brand-new job but doesn’t have much data about that role, Payscale Verse uses Payscale Peer’s data and AI modeling to find similar roles in different locations. Then, the AI algorithm takes those differentials and suggests a market price to match the new job.
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Companies are using AI in human resources to bolster their employee compensation strategies.
-
AI can help analyze compensation data across markets, which is useful for pricing new and rare roles.
-
This article is part of “Culture of Innovation,” a series on how businesses can prompt better ideas.
With the help of AI, some companies are bringing more structure and strategy to how they compensate employees.
A 2025 survey from Korn Ferry found that roughly a quarter of the 5,717 companies they surveyed are using AI to help determine compensation. Though just 22% of surveyed companies said they are using AI for external-pay benchmarking, 63% say they are considering using it.
Ruth Thomas, the chief compensation strategist at the software company Payscale, said that when companies use AI to analyze large amounts of compensation-related data, it can help promote pay transparency and provide HR teams with an additional tool for understanding new and changing job markets.
At the same time, human resources workers should still audit and monitor AI-driven data tools to keep confidential information safe and avoid data errors that can lead to pay bias, said Gord Frost, the global rewards solution leader at global consulting firm Mercer.
At Payscale, the company uses a combination of AI modeling and HR-contributed salary data to help its customers price jobs, Thomas said.
The tool that does this, Payscale Verse, is especially useful when data is limited because a job is new to an industry or has rare requirements for its location, company size, education, or experience level, Thomas said.
“Sometimes our jobs are really niche, and we have a hard time finding matches for them,” said Kristen Damerow, an HR analyst at SmithGroup, an architectural firm that uses Payscale’s services.
There’s also Payscale Peer, a dataset built from salary information that includes compensation data from more than 5,400 organizations, Thomas said. This data is pulled daily from human resource information systems, or software platforms that help companies manage their operations. It’s 100% employer-reported, which is different from job-posting data that other compensation vendors use, she added.
Peer can show Payscale users what the market is paying for certain roles now, as opposed to purchasing a salary survey from a survey provider, where the information can be outdated. Thomas said if a compensation manager is trying to set a salary for a brand-new job but doesn’t have much data about that role, Payscale Verse uses Payscale Peer’s data and AI modeling to find similar roles in different locations. Then, the AI algorithm takes those differentials and suggests a market price to match the new job.
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