ChatGPT, an AI technology that has generated excitement in the field of artificial intelligence, is not yet ready to provide accurate salary benchmarks for companies. Tests revealed that the AI came up with a range of $100,000 to $120,000, or more than $150,000 in high-cost cities, for a five-year-experienced software engineer in the US. This is far above the average base rate of $87,000, as per anonymous data from Ceridian clients. However, ChatGPT’s results for cashier salaries were more accurate, providing an average base rate of $10 to $13 per hour or $20,800 to $27,040 per year for those with five years of experience.
It is essential to have accurate salary data that is based on good insight. Paying an employee less than the market rate can lead to not filling job positions, extended hiring processes or losing good employees, leading to gaps in the workforce and increased hiring costs. Overpaying can also lead to increased operating costs. ChatGPT considers the important factors such as experience, expertise, education, and even company size and type, among other things, when determining salaries. However, the question text has a substantial impact on the response. For example, when asked to provide data as a member of the compensation team, ChatGPT refined its response for a software engineer or software developer in the US with five years of experience.
One must understand that data ChatGPT has been trained on and the data’s age. Unless updated and retrained, the data available to ChatGPT could be outdated. As a result, HR teams should be educated on utilizing ChatGPT and updating the system. Although ChatGPT has grown in popularity in a short time, privacy concerns and accuracy remain important roadblocks to overcome. Therefore, ChatGPT should not be the only source of compensation benchmarking analysis. Future training with new data can provide more accurate and up-to-date results.
Frequently Asked Questions (FAQs) Related to the Above News
What is ChatGPT?
ChatGPT is an AI technology that is utilized to determine salaries based on various factors such as experience, expertise, education, and company size among others.
Is ChatGPT currently equipped to provide accurate salary benchmarks for companies?
Tests have shown that while ChatGPT provides accurate salary benchmarks for certain roles such as cashiers, it is not yet equipped to provide accurate salary benchmarks for other roles such as software engineers. The results for software engineers are far above the average base rate reported by Ceridian clients.
Why is it important to have accurate salary data for employees?
Accurate salary data helps avoid situations where employees are paid less than the market rate. This helps avoid situations where job positions aren't filled quickly, leading to gaps in the workforce and increased hiring costs. On the other hand, overpaying employees leads to increased operating costs.
What factors does ChatGPT consider when determining salaries?
ChatGPT considers various factors such as experience, expertise, education, company size, type and even question text when determining salaries.
Can a company rely solely on ChatGPT for compensation benchmarking analysis?
No, it is important to understand that while ChatGPT provides useful insights, it should not be the only source of compensation benchmarking analysis. HR teams should be educated on utilizing ChatGPT and updating the system since the data available to ChatGPT could be outdated.
What are the roadblocks ChatGPT faces in providing accurate salary benchmarks?
ChatGPT faces roadblocks such as privacy concerns and outdated data. It is important to note that training with new data can provide more accurate and up-to-date results.
Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.
