TLDR: A recent report by Payscale reveals that employees are increasingly turning to AI tools like ChatGPT and social media platforms for salary information. This trend is leading to inflated pay expectations and a significant ‘pay confidence gap’ between employers and employees, contributing to increased employee turnover due to salary-related conflicts.
A new report from Payscale, a leading provider of compensation intelligence solutions, indicates a growing reliance among employees on artificial intelligence and social media platforms for gathering pay information. This shift is creating a significant disconnect between employer and employee salary expectations, often fueled by misinformation.
The ‘2025 Pay Confidence Gap Report,’ which surveyed 1,000 employees in the U.S. and 500 business leaders, including HR managers, found that approximately one in five employees (18%) are now using AI assistants like ChatGPT for compensation insights. Similarly, 19% of employees are sourcing salary data from social media platforms such as TikTok, Reddit, Instagram, and Facebook. Employers are keenly aware of this trend, with 70% noting an increase in employees using generative AI for salary information.
This new approach to salary research is having a tangible impact on expectations. The report highlights that 27% of employees who use AI for salary research believe it has inflated their expectations compared to other sources. A substantial 38% of employers concur, stating that the use of generative AI is driving salary demands higher than ever before. Furthermore, 35% of employers reported that employees are receiving conflicting information about their pay.
The consequences of this misinformation are significant for businesses. A striking 63% of HR and business leaders surveyed have observed an increase in employees approaching them with salary requests based on inaccurate or unverified data in the past year. Beyond AI and social media, 72% of employers also noted a rise in employees negotiating salaries based on general online information, with 26% of employees using search engines and 36% using similar job postings for their research.
Ruth Thomas, Chief Compensation Strategist at Payscale, commented on the findings, stating, “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 emphasized the critical need for employers to engage in transparent, data-driven conversations about pay to improve employee confidence.
The report also underscores a widening ‘pay confidence gap.’ While 93% of employers believe their employees trust their pay decisions, only 69% of employees actually express trust in their employer’s compensation decisions. This disparity, coupled with misinformation, is contributing to increased employee turnover. Nearly half (48%) of employers reported a rise in employee turnover due to salary-related conflicts over the past year, and a significant 66% of employees admitted they would consider leaving their job if a salary-related conversation went poorly.
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In light of these findings, the report suggests that employers must develop robust compensation strategies rooted in transparency and clear communication to bridge the confidence gap and mitigate the negative impacts of unverified online salary information.
