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| 1 minute read

Coming Soon to an Employer Near You: AI-Driven Compensation Management

Each year, Mercer issues a year-end executive incentive and benefits survey revealing insights gathered from a variety of U.S. public and private companies.   The results of the 2023 year-end survey have been released and, not surprisingly, they contain insights on the topic of the hour “Artificial Intelligence”.   With the recent environment of persisting inflation and wage hikes, it is not surprising that, when asked about their organization's usage of AI in compensation management, many companies have this issue top of mind.  While public companies appear to be the first movers into the space, with some already embracing or actively working toward embracing AI tools in compensation management, nearly one-third of private companies surveyed are intrigued and responded that they are exploring use of AI in compensation management….

No doubt, AI use in the workplace is just approaching the tip of the iceberg; however, thoughtful deployment of AI's power in compensation management could mean that employers are able to better adapt and align within their organizations, their industries and their markets.  AI tools in compensation structuring and overall management might lead to better recruiting and retention for some employers as well.  However, the AI-informed compensation tools must be thoughtfully vetted and implemented to avoid the inevitable legal challenges and introduction regulations targeting misuse or perceived misuse.

As Artificial Intelligence (AI) comes to the forefront of business innovation, companies are increasingly searching for ways to leverage the technology for improved business performance. Our recent Year-end executive incentive & benefits survey of US public and private organizations indicates companies are increasingly adopting and leveraging AI in compensation management.


compensation management, l&e, ai