COMP NEWS – Salary negotiations between two parties are complex and emotionally charged processes. Would they be any easier with a robot in the room? Some companies will find out as they explore plans to engage in salary negotiations with AI tools.

Salary negotiations — among the most high-stakes, emotionally fraught and psychologically complex processes many employees will ever experience — could soon get the artificial-intelligence treatment.

What’s happening: Pactum AI, the world’s largest provider of automated procurement negotiation, has been using AI chatbots to negotiate the packages of its employees since 2021.

• Ironclad, a startup backed by Sequoia and Accel, is gearing up to launch an AI agent that specializes in employment contract analysis.
• Individuals can use publicly available chatbots to role play negotiations and brainstorm compensation packages.

According to some experts, rolling out AI to lead sensitive negotiations carries inherent risks and challenges, especially around sensitive payroll data.

Yes, but: AI could also disadvantage workers in compensation negotiations, or leave them unsatisfied in new ways.

• Workers who aren’t given full context or who provide poor prompts to the chatbot will likely be at an information disadvantage.
• Automating low-value product contracts is one thing, but palming off highly-skilled or unique talent to a chatbot risks alienating the most desirable new hires.
• Payroll data is sensitive. A poorly trained chatbot could compromise individual privacy and commercial secrets.

If used correctly, others see AI as a supplementary tool that could assist multiple parties in negotiation talks.

The other side: Other players in labor negotiations, from unions to tech startups, see opportunity in having AI assist in traditional contract talks.

• American Teachers Federation president Randi Weingarten told Axios that “AI has the potential to help” so long as it’s a supplement rather than substitute for human input, and each side has access to a given tool’s benefits.
• “There are elements of collective bargaining, such as costing out contracts, where smart technology has and could play a role. But the key to successful negotiations is relationships, not automation,” Weingarten said.
• “Negotiation is an inherently human interaction that requires human intelligence. Tools that use AI to assist negotiation will win, and those using AI to entirely automate the process will lose,” Ironclad CEO Jason Boehmig told Axios.

To read more about how AI might begin negotiating salary expectations, click here.

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