Companies are increasingly using AI and labor-market data to decide what jobs should pay, giving employers a faster way to determine what the market thinks an employee is worth, according to The Wall Street Journal.
The shift is moving compensation benchmarking away from annual or periodic salary surveys toward systems that combine AI with public job listings, payroll records and other real-time data.
One company enabling this process is Stello AI, which analyzes salary data from job listings, online forums such as Glassdoor and data bought from payroll companies.
“We tell you exactly how much to pay your employees,” Chief Executive Amee Parekh told the Journal. A certain type of worker gets special attention: “Here are your high performers who are underpaid. If you have any budget for raises, these are the first ones you should fix.”
But Stello can also spot people who are overpaid vis-a-vis the market. They may not get fired but they could face more pressure to perform and also see more modest pay increases.
A survey by the Conference Board shows that employees with AI skills could be better rewarded.
The trend gives HR departments more current information in labor markets. It also puts more weight on algorithms that influence compensation decisions, making data quality, job matching and human oversight increasingly important.