[Global] ChatGPT cannot yet handle salary benchmarking

ChatGPT - the AI technology that has been grabbing headlines and sparking debates - may be advanced but it isn’t quite ready to assess whether companies are offering the right salaries to retain and attract talent, Benefit News reports.

This determination was made after Brittany Schmaling - Senior Data Analyst at Ceridian - put the AI chatbot to the test. 

When asked, "What salary should I offer a software engineer in the U.S. with five years experience?" ChatGPT reportedly replied with a $100,000 to $120,000 a year range. And maybe more than $150,000 a year in high-cost cities such as San Francisco, New York, and Seattle. 

Not wildly far off the mark, however, Ms Schmaling says that anonymised data from Ceridian clients shows the US salary for individuals with "software engineer" or "developer" in their title is closer to an $87,000 base. And that rate is for people with five years of experience. 

Ceridian then ran a second test on cashier salaries with more success from ChatGPT.  

ChatGPT reportedly found that the average base rate for a cashier with five years of experience in the US is $10 to $13 an hour, or $20,800 to $27,040 a year, based on a 40-hour workweek. While Ceridian’s salary benchmark data shows the average base salary for a US cashier with five years’ experience to be $29,854, or $14.35 an hour.  

When establishing salaries, offering even a fraction beneath the market rate can result in failure to fill jobs, extra time spend filling vacancies, or loss of talent causing gaps in the workforce and increased hiring costs. Overpaying for a role has its own downsides, such as increased operating costs. 

In addition, if organisations start using a new tool that varies from that used previously, they must ensure that they are checking the new salaries against those of existing employees to safeguard against discrepancies. Ceridian emphasises that this is why it is important to have good data on which to base salaries and clear insight into exactly what that data entails. 

The right factors

ChatGPT did reportedly consider many of the important factors in its analysis. When coming up with the estimate for software engineers, for example, ChatGPT considered more than high-cost cities. It also noted that salaries can vary depending on the size and type of company. Large tech companies or engineers with machine learning or AI expertise may command more, it said. 

The chatbot also found that an individual's expertise and accomplishments mattered, including certifications, and noted that there is usually room for negotiation. It reported that talented software engineers with a strong track record and in-demand skills could potentially command a higher salary and noted that many companies offer various forms of compensation such as stock options, bonuses and benefits packages that can boost overall compensation. 

The way ChatGPT is spoken to also makes a difference, according to Ms Schmaling. She reportedly found that its response was more accurate when her question was put more succinctly, "Hi ChatGPT, I want you to act as a member of our human resources compensation team. How much should I pay a software engineer or software developer in the U.S. with five years of experience? What would be the average base rate and average salary?" 

The AI software replied, "As a member of the compensation team, I can provide you with some information on the average base rate and salary for a software engineer or software developer in the United States with five years of experience. The average base rate… is around $40.00 to $60.00 per hour. This means that the software engineer or developer would earn an annual salary of approximately $83,200 to $124,800 based on a standard 40-hour workweek."  

In addition, it noted that there would be differences based on location, type of company, exact skill level and experience and education and increased its range from $80,000 to $150,000 a year.  

This change in answer reportedly happened because Ms Schmaling asked ChatGPT to act as a member of the HR team. The chatbot became more selective about the data pool it chose from and likely selected more HR-focused sources.

An internal study conducted by Ceridian in 2019 revealed that self-reported salaries from sites such as Paysa can contain inflated salary data. Only 44 per cent of self-reported salaries fall within the actual salary range, based on Ceridian client data.  

The future
Considering how quickly ChatGPT took off, Ms Schmaling says there are probably big growth spurts ahead. When ChatGPT launched in November 2022, it gained more than one million users in five days. Going forward, Ceridian reportedly expects a few roadblocks, particularly around privacy concerns and the accuracy of answers.  

 As the test showed, ChatGPT is, for the time being, just another source of information and one unlikely to be suitable as the sole source of analysis for something as important as compensation benchmarking. 

 As ChatGPT improves, Ms Schmaling advises that HR teams should learn how to use and update it. For the best results, HR professionals must know how to talk to ChatGPT and ChatGPT must continually be trained with new data to ensure that it remains relevant.

Source: Benefit News

(Quotes via original reporting)

ChatGPT - the AI technology that has been grabbing headlines and sparking debates - may be advanced but it isn’t quite ready to assess whether companies are offering the right salaries to retain and attract talent, Benefit News reports.

This determination was made after Brittany Schmaling - Senior Data Analyst at Ceridian - put the AI chatbot to the test. 

When asked, "What salary should I offer a software engineer in the U.S. with five years experience?" ChatGPT reportedly replied with a $100,000 to $120,000 a year range. And maybe more than $150,000 a year in high-cost cities such as San Francisco, New York, and Seattle. 

Not wildly far off the mark, however, Ms Schmaling says that anonymised data from Ceridian clients shows the US salary for individuals with "software engineer" or "developer" in their title is closer to an $87,000 base. And that rate is for people with five years of experience. 

Ceridian then ran a second test on cashier salaries with more success from ChatGPT.  

ChatGPT reportedly found that the average base rate for a cashier with five years of experience in the US is $10 to $13 an hour, or $20,800 to $27,040 a year, based on a 40-hour workweek. While Ceridian’s salary benchmark data shows the average base salary for a US cashier with five years’ experience to be $29,854, or $14.35 an hour.  

When establishing salaries, offering even a fraction beneath the market rate can result in failure to fill jobs, extra time spend filling vacancies, or loss of talent causing gaps in the workforce and increased hiring costs. Overpaying for a role has its own downsides, such as increased operating costs. 

In addition, if organisations start using a new tool that varies from that used previously, they must ensure that they are checking the new salaries against those of existing employees to safeguard against discrepancies. Ceridian emphasises that this is why it is important to have good data on which to base salaries and clear insight into exactly what that data entails. 

The right factors

ChatGPT did reportedly consider many of the important factors in its analysis. When coming up with the estimate for software engineers, for example, ChatGPT considered more than high-cost cities. It also noted that salaries can vary depending on the size and type of company. Large tech companies or engineers with machine learning or AI expertise may command more, it said. 

The chatbot also found that an individual's expertise and accomplishments mattered, including certifications, and noted that there is usually room for negotiation. It reported that talented software engineers with a strong track record and in-demand skills could potentially command a higher salary and noted that many companies offer various forms of compensation such as stock options, bonuses and benefits packages that can boost overall compensation. 

The way ChatGPT is spoken to also makes a difference, according to Ms Schmaling. She reportedly found that its response was more accurate when her question was put more succinctly, "Hi ChatGPT, I want you to act as a member of our human resources compensation team. How much should I pay a software engineer or software developer in the U.S. with five years of experience? What would be the average base rate and average salary?" 

The AI software replied, "As a member of the compensation team, I can provide you with some information on the average base rate and salary for a software engineer or software developer in the United States with five years of experience. The average base rate… is around $40.00 to $60.00 per hour. This means that the software engineer or developer would earn an annual salary of approximately $83,200 to $124,800 based on a standard 40-hour workweek."  

In addition, it noted that there would be differences based on location, type of company, exact skill level and experience and education and increased its range from $80,000 to $150,000 a year.  

This change in answer reportedly happened because Ms Schmaling asked ChatGPT to act as a member of the HR team. The chatbot became more selective about the data pool it chose from and likely selected more HR-focused sources.

An internal study conducted by Ceridian in 2019 revealed that self-reported salaries from sites such as Paysa can contain inflated salary data. Only 44 per cent of self-reported salaries fall within the actual salary range, based on Ceridian client data.  

The future
Considering how quickly ChatGPT took off, Ms Schmaling says there are probably big growth spurts ahead. When ChatGPT launched in November 2022, it gained more than one million users in five days. Going forward, Ceridian reportedly expects a few roadblocks, particularly around privacy concerns and the accuracy of answers.  

 As the test showed, ChatGPT is, for the time being, just another source of information and one unlikely to be suitable as the sole source of analysis for something as important as compensation benchmarking. 

 As ChatGPT improves, Ms Schmaling advises that HR teams should learn how to use and update it. For the best results, HR professionals must know how to talk to ChatGPT and ChatGPT must continually be trained with new data to ensure that it remains relevant.

Source: Benefit News

(Quotes via original reporting)