The latest Indeed report points to a growing disconnect in artificial intelligence (AI) compensation. While 66% of employers reported that they offer salary premiums for AI-skilled workforce, with many paying 11-30% higher salaries than non-AI roles, 54% of AI-exposed employees reported stagnant or lower pay over the past year. This mismatch suggests that companies are rewarding new hires more generously than existing employees who upskill, potentially creating retention problems as AI adoption gathers pace.
According to the Indeed’s inaugural AI at Work Tracker 2026, 26% of the employers said that AI-skilled positions command salary premiums of 31-50%. In comparison, a large chunk of employees working for those AI roles on a daily basis reported no change or decline in their earnings. For instance, 36% reported no change in compensation and 18% said their earnings had declined over the past year. Only a small minority achieved the high-bracket increases advertised in the external job market.
Employee Retention Risks
The report, based on a survey of 1,267 employers and 2,541 employees across India, indicates that while the external hiring market is aggressively pricing AI expertise to attract new talent; internal corporate compensation cycles are lagging significantly, leaving existing mid-career and senior professionals behind.
“Winning the AI transition requires organisations to align their internal appraisal models with the real-world value their upskilled employees are generating,” said Sashi Kumar, managing director of Indeed India.
The findings also challenge the popular perception that AI is rapidly changing various job roles. Just 11% of employees said AI had completely transformed their role, while 65% reported moderate or incremental changes. Nearly a quarter said AI had not yet changed the way they work.
Skills-First Hiring
The report noted that the hiring practices are also evolving as employers place greater emphasis on demonstrable AI skills than formal degrees. Almost 40% employers now prioritise AI skills and certifications over university degrees when recruiting for AI roles, while only 9% continue to rely primarily on academic credentials. Employees appear to recognise this shift as well, with nearly 37% believing employers now value skills and degrees equally and 31% saying AI skills carry greater weight than formal qualifications.
Further, the AI is reshaping the mindset of employees with more than half of respondents identified themselves through their skills and ability to learn, compared with just 17% who primarily associated themselves with their designation. At the same time, anxiety around AI remains widespread with 42% expressing concern about its impact on their careers, especially among unemployed job seekers.
Despite these concerns, AI hiring continued to strengthen through 2025, with 63% of employers reporting an increase in recruitment for AI-related roles compared to the previous year. “Rather than a dramatic hiring surge, the findings point to steady growth across functions such as AI engineering, strategy, operations, governance and ethics, reflecting how organisations are embedding AI capabilities into their existing workforce,” it said.