Employers are using AI tools that could kill your raise — even if you’re a high performer: ‘We tell you exactly how much to pay your employees’

“We tell you exactly how much to pay your employees,” says Amee Parekh, chief executive of Stello AI, to the Wall Street Journal. Stello AI’s webpage says you can use its AI agent to make job offers, figure out your company’s budget, and “answer comp questions.”

Research from Resume Builder finds that 60% of managers use AI for personnel decisions, including deciding raises and promotions. Over one in five managers allow these AI tools to make final personnel decisions without any human input at all.

Here’s why that’s such a problem — and how you can negotiate a salary bump in this new system.

Managers are using AI to make personnel decisions — even if they aren’t trained on the tools

If your manager is part of the 65% who uses AI tools, they’re almost certainly using it to make personnel decisions. But only a third of those managers have been trained on how to use the same tools that are deciding your salary.

“While AI can support data-driven insights, it lacks context, empathy, and judgment,” said Resume Builder’s chief career adviser, Stacie Haller, in the report. “AI outcomes reflect the data it’s given, which can be flawed, biased, or manipulated. Organizations have a responsibility to implement AI ethically.”

AI has already shown bias in hiring. Stanford researchers found that AI hiring tools showed racial bias against Black and Asian job applicants — a huge problem when 90% of all employers use AI to make hiring decisions.

This bias could have dire results for groups that are already less likely to receive raises.

There is one silver lining, though. An increase in pay transparency laws means that AI models have more data to pull from when they try to figure out how your pay compares to market rates.

If you’re being paid below market standard, this could lead to better pay equity between you and your peers in an attempt to keep you onboard.

Unfortunately, if you’ve worked hard to optimize your salary, you might be hit with a smaller pay raise than you expect.