• 1 in 5 employees are sourcing salary information from AI assistants and another 1 in 5 are turning to social media platforms like TikTok, Reddit, Instagram, and Facebook
• 27% of employees using AI assistants, like ChatGPT, for salary research said it gave them higher salary expectations than other sources and 38% of employers agree that the use of generative AI in salary research is driving salary higher expectations than ever
• 63% of HR and business leaders surveyed have seen an increase in employees coming to them with salary requests based on inaccurate or unverified data in the last year, with nearly half reporting an increase in employee turnover due to salary-related conflicts over the past year
  

BOSTON, July 15, 2025 (GLOBE NEWSWIRE) -- Payscale Inc., the leading provider of compensation intelligence solutions, today released its 2025 Pay Confidence Gap Report, revealing a widening disconnect between employers and employees around salary expectations, fueled by pay misinformation.

Generative AI is quickly becoming a go-to tool in salary research. The 2025 Pay Confidence Gap Report shows that roughly one in five employees (18%) turn to AI assistants like ChatGPT for compensation insights, and 70% of employers have noticed a rise in employees using AI to shape salary expectations. But using generative AI as a barometer of salary expectations is creating new tensions; 27% of AI-using employees say it inflated their expectations compared to other sources, and 38% of employers agree AI tools are driving salary demands higher than ever before.

Social media platforms like TikTok, Reddit, Instagram, and Facebook are also major drivers of unverified salary information. With one in five employees (19%) using these platforms for their salary research, the spread of pay misinformation is further amplified. In fact, 63% of HR and business leaders surveyed have seen an increase in employees coming to them with salary requests based on inaccurate or unverified data in the last year. This is fueling employee distrust around salaries, with nearly half (48%) of employers reporting an increase in employee turnover due to salary-related conflicts over the past year.

The report reveals that employers may be underestimating this pay confidence gap and falling short on effectively communicating pay decisions and strategies. Employers overwhelmingly believe their employees trust their pay decisions (93%). However, employees aren’t so optimistic, with only two thirds (69%) reporting they trust their employer’s decisions on pay. Almost half of employees (41%) say they have never had a transparent discussion with their employer about how their pay is determined. Without clear communications from managers and HR leadership, employees are left to seek information from other sources like AI and social media.

“The avenues for employees to educate themselves on salary expectations are expanding,” said Ruth Thomas, chief compensation strategist at Payscale. “Employees are still gaining knowledge from traditional sources like family and friends and industry salary guides, but AI and social media are driving up salary expectations without the verified data and role context needed to inform compensation. In the face of mounting misinformation, too many employers aren’t having the right conversations with their employees about pay. It’s critical they develop compensation strategies that are rooted in transparency, driven by data, and ensure compensation decisions are communicated clearly to improve pay confidence among employees.”

Additional findings from Payscale’s Pay Confidence Gap Report include:

• Salary conversations are becoming increasingly challenging for employers to navigate: Almost three quarters (72%) of employers have seen an increase in employees negotiating salaries based on information they've found online in the last year, highlighting the importance of arming managers with the right data to navigate tough pay conversations. Two-thirds (66%) of employees would consider leaving their job if a pay conversation is handled poorly. To combat the rise of tough pay conversations, HR leaders are looking for support from leadership on pay decisions (46%), greater pay transparency (44%), and reliable, accurate, and up-to-date compensation data insights (42%).
• Cost of labor versus cost of living puts regional pay differences in the spotlight: While employers are more focused on the cost of labor, employees are feeling the strain of the rising cost of living. Two-thirds (66%) of employers reported an increase in the number of employees challenging their pay based on the local cost of living in the last year and almost half (47%) report internal conflicts over pay differences between employees in different geographies. As a result of these conflicts, almost half (49%) of employees have considered leaving their job in the last year because they don’t feel their salary has kept up with the cost of living in their city or region. Two thirds (64%) of the employers surveyed say they are actively hiring U.S. employees from locations with a lower cost of living to keep salaries down.
• Economic uncertainty reshapes pay conversations and workforce decisions: The state of the economy is impacting salary conversations for both employers and employees. More than half (53%) of employers expect pay conversations to become more challenging over the next year due to economic uncertainty. A third (33%) are reassessing their pay structures and 32% report being more cautious with pay increases. For employees, the report reveals an equally cautious approach to pay conversations, with only 23% saying they are more likely to ask for a salary increase in the current economic climate.
• A growing focus on merit-based pay amid an ongoing talent crunch: Skills shortages are reshaping employee leverage in pay negotiations. Over two-thirds of employers (68%) say skills shortages have impacted employee bargaining power over the past year, and most (70%) have increased compensation beyond typical pay ranges to attract or retain top performers. Employees bringing special skills expect to be rewarded for high performance, and 76% of those surveyed said they would consider leaving their job if their performance isn’t adequately reflected in their compensation package. Yet, a third (32%) of employees surveyed feel they are not adequately compensated based on their performance. Employees at lower job levels were more likely than managers or executives to feel that their performance did not affect their pay.

To provide a comprehensive analysis of the key compensation challenges facing employers and employees, Payscale surveyed 1,000 US employees (aged 18+) and 500 US business leaders, HR leaders, and HR managers with responsibility for compensation decision-making within their organization. The full report and its methodology can be accessed here.

About Payscale

Payscale is the original compensation innovator for organizations who want to scale their business with pay and transform their largest investment into their greatest advantage. With decades of innovation in sourcing reputable data and developing AI-powered tools, Payscale delivers actionable insights that turn pay from a cost to a catalyst. Its suite of solutions — Payfactors, Marketpay, and Paycycle — empower 65% of Fortune 500 companies and businesses like Panasonic, ZoomInfo, Chipotle, AccentCare, University of Washington, American Airlines, and TJX Companies.

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Contact: Press@Payscale.com