The impact of AI on pay and reward is beginning to be felt by organisations as the technology moves further into the workplace.

According to Mark van Zon, a Client Partner in Korn Ferry’s EMEA Pay Equity practice, organisations are are finding that AI is not just a ‘hot skill’ to reward but is also acting as a catalyst for redesigning how to define employee value, differentiate pay, and allocate talent investments.

However, while this change is taking place, Korn Ferry’s own Global Total Rewards Pulse Survey suggests that the managers responsible for explaining reward changes to employees are not yet ready for the conversation. According to the Survey’s findings just 16% of organisations are confident their managers can explain AI-related pay and work changes to employees.

“The war for AI talent is creating the biggest shift in compensation philosophy since the rise of knowledge work,” says van Zon. “Korn Ferry's survey shows that AI, skills, mobility, and capability building have become top workforce priorities, while skills scarcity is driving new forms of compensation differentiation and pay premiums.”

Van Zon believes companies are moving beyond traditional job-based compensation models toward approaches that reward critical capabilities, future-readiness, and learning agility. “In many cases, employees with scarce AI capabilities are commanding disproportionate rewards because they can create outsized business value, automate work, and accelerate transformation,” he explains.

“The message is clear,” he adds, “the future of rewards is becoming less about job titles and more about strategic skills portfolios.”

While organisations may be dragging their feet over this issue, progress is likely to be quick and radical over the next year: “Early wins in reward communications, pay transparency, job architecture, skills identification, and market benchmarking will expand into more sophisticated applications such as predictive workforce analytics, AI-driven pay decision support, and personalised rewards,” says van Zon. 

“Organisations that build AI capability, governance, and manager confidence now are likely to create a widening competitive advantage; those that delay may discover that AI is no longer a technology initiative they can choose to adopt, but an operating reality they are forced to catch up with,” he concludes.

Elsewhere, a recent study from Mercer found that AI and automation could replace more than half (52%) of a rewards team’s workload, including tasks related to routine employee enquiries and benefits administration. The company’s Global Talent Trends 2026 study found HR leaders using or planning to use AI to support a range of tasks – including benefits enrolment (89%), performance management (85%) and evaluating changes in the market value of different skillsets (87%).

It seems reward specialists will not just be dealing with the impact of AI on others in their workforce – it is something they will need to deal with themselves.