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Your Next Career Coach Could Be an AI Chatbot

Posted on by darion

AI-powered coaching programs are cheap, accessible, and increasingly popular for practicing difficult workplace conversations or getting tips on negotiating a raise. But privacy concerns and skepticism about the quality of non-human responses can slow adoption.

By Maria Gracia Santillana LinaresForbes Employees

YesYou trusted artificial intelligence plan your vacation itinerary, write a cover letter for a new job, or even flirt with your next date on your behalf. But would you trust him with career advice?

More and more companies are betting that will be the case. Employee coaching or training platforms like BetterUp, Multiverse, and LinkedIn — as well as startups like Valence and Wisq — are just a few of the AI-powered coaching chatbots entering the market.

In a time of layoffs and budget cuts, as companies seek to help employees improve their interpersonal skills, artificial intelligence is emerging, paradoxically, as a cheaper and more accessible alternative to traditionally expensive human-based coaching.

AI coaching broadly refers to a variety of apps and programs that are powered by generative AI technology and provide advice on difficult situations or professional challenges. Users send queries to the chatbot and receive real-time, interactive feedback on everything from the best way to negotiate a raise to how to search for a new job, to how to delegate work or provide feedback to team members.

According to data from Gartner’s HR department, this is still a relatively niche industry. Forbes It’s still too small a market to measure — but employers and employees alike are starting to embrace it. Its emergence comes at a time when more people and companies are understandably looking for help with career advancement. In an economy where fewer people are leaving or changing jobs, workers are nervous about advancement opportunities. Meanwhile, many are feeling frustrated by the lack of hands-on management training during the pandemic or concerned about how artificial intelligence is already changing job descriptions and making some of their skills obsolete.

About 47% of companies surveyed by LinkedIn for its 2024 Workforce Report said they were investing in mentoring and career coaching for their employees, and a Gartner study found that 42% of employees would feel comfortable asking an AI coach about their next career steps. Another study by INTOO, a career and outplacement firm, found that nearly half of respondents aged 21 to 26 felt they got better advice from AIs, including ChatGPT, than from their managers.

It’s no wonder startups are attracting investment and companies are rolling out new products. In June, for example, Menlo Park, California-based Rising Team closed an $8 million seed round, which it’s using in part to add AI leadership coach aRTi to its team performance platform. AI executive coaching tool Wisq, which has raised more than $40 million in funding since May 2021, launched a new program in April aimed at mid-level managers.

“Employers are everywhere,” says Ujjwal Singh, chief technology and product officer at London-based apprenticeship startup Multiverse, adding that 64% of his clients now use his AI career coach. That’s a 15% increase from the previous quarter. “They’re really pushing it.”

But even as demand grows, AI career coaching faces obstacles to widespread adoption, including concerns from some employees about the privacy of employer-provided sessions and questions about the quality of the tools’ responses. More personalized responses rely on personal data that users may not want to provide — and real-world experiences that human coaches can draw on when advising clients.

Some early research suggests that AI coaching may be just as effective as the human version in some scenarios. For example, a study published in the journal PLOS found that research groups using human and AI coaches were equally effective at achieving their goals.

But at this point, skepticism is still warranted. “We’re a long way from the typical human who wants (coaching) from a machine,” says Joseph Fuller, a Harvard Business School professor who co-directs the Managing the Future of Work initiative. But he adds that given the rapid improvements in AI, “it’s pretty foolish to bet against them.”

Got a tip? Contact Maria Gracia Santillana at [email protected] or @mgsantillana.70 on Signal.

Tmuch of it is certain: AI coaching is much cheaper for employers than human coaching, which, at an average cost of $244 per hour, was typically offered only to top employees or senior executives. (By comparison, Wisq charges $50 to $150 per user per year for a combination of human and AI coaching.) It’s also designed to be accessible, with several AI coaches integrated directly into apps most employees use every day, like Slack or Microsoft Teams..

The U.S. coaching market was expected to be worth $14.2 billion in 2023, according to research firm IBISWorld. During the pandemic, Zoom has allowed coaches to take on remote clients, further expanding their client base, notes Carlos Cuadrado Ortiz, associate director and coach at consulting firm Korn Ferry.

AI could be a huge accelerator for the industry, enabling companies to provide coaching to more employees and allowing human coaches to serve more clients with AI tools to answer the simplest of questions. That explains why some large career firms are adding AI features or acquiring smaller startups. For example, LinkedIn launched a virtual AI coach in October that helps users find new job offers tailored to their profiles. The AI ​​coach’s answers come from large language models that are trained on advice from a handful of human coaches who earn royalties.

In March, BetterUp, a coaching and mental health platform that has reached unicorn status (it was last valued at $4.7 billion in 2021, according to Pitchbook ), acquired Practica, an early AI coaching provider, to expand its own AI offerings. (The company still offers human coaching to all users.) The new AI services include a “role-playing” feature that lets users practice conversations with a voice-controlled chatbot about sensitive topics, like asking for a raise or sharing critical feedback. For example, the AI ​​might tell a user that they sounded defensive when delivering bad news or too nervous when making a case for a promotion.

Meanwhile, startups like Toronto-based Valence and Paris-based Coachello have added AI chat bots to their online coaching services in the past year. Grettel Seiger, a leadership development manager based in Basel, Switzerland, started testing Coachello with a small group of employees a month ago and says it was a way for associates to get help earlier in their careers without the high cost.

Those who have started using it have shared the dilemmas they’ve faced, she adds, noting that “you don’t feel judged,” as some managers do. Asking follow-up questions to the AI ​​chatbot has also helped her narrow down exactly what help she needs. “The whole process has been cathartic,” she says.

Bbut good coaching, and good advice, rarely rely on quick answers; they rely on probing questions — or, in AI-speak, collecting more data. “Coaching is about steering someone in a certain direction (or) nudging people,” says Multiverse’s Singh. “I don’t think AI is there yet” for complex, relationship-focused questions, he adds.

In general, some AI tools are known for making up answers or sometimes giving out incorrect information. Massara Almafrachi, a third-year law student at Western New England Law School, says that asking an AI chatbot for career advice resulted in confusing and irrelevant answers. “I’m already confused about my career,” she says. “AI (just) throws me into a deeper loop.”

Katie Kirsch, founder of coaching firm Lume and 2024 Forbes The Under 30 list maker says she may one day incorporate AI features into her platform. But earlier this year, she tried AI tools herself and found the advice lacked depth: “Those kinds of conversations (from my coach and I) felt impossible to replace in an AI format.”

Ultimately, AI chat bots are only as powerful as the amount and quality of data they’re fed, and how well the tools are built. To provide a personalized approach, AI coaching companies must effectively coax users into revealing specific, personal information, says Harvard’s Fuller. “You end up with a chicken-and-egg problem—not having access to a lot of data until you get the quality that you can only get from a lot of data,” he says.

Then there’s the issue of confidential information. Most AI coaching companies offer their services directly through employers, which can make users reluctant to ask what they really want to know. How many employees who want advice on leaving a job or dealing with a toxic boss would feel comfortable asking those questions to a chatbot offered by their employer?

AI coaching providers counter that confidentiality agreements prevent the tools from sharing personal data with employers, and any reports they generate for employers only show aggregated, anonymized results. (Some, like BetterUp, also say users can opt out of having their data used to train language-learning models, while others, like Valence, say they don’t use employee-chatbot conversations to train their models.)

Meanwhile, “employees are generally aware that the tools provided by the company are tailored to meet the company’s goals, which are not always aligned with their goals,” says Hatim Rahman, a management professor at Northwestern University’s Kellogg School of Management who studies the impact of AI on employment.

Despite potential privacy concerns and the fact that AI coaching models still have a lot of learning to do, tech-savvy employees are increasingly embracing them. “There’s no judgment built right into the tool,” says Michael Woodward, director of New York University’s Coaching Innovation Lab. “It’s pure math.”

In addition to Gen Z workers, another unlikely demographic has become an unlikely user of AI coaching: middle-aged men. Multiverse reports that it’s seeing the most growth among those 40 and older; in June, 46% of eligible workers over 40 used Atlas, its AI coaching service, compared to just 31% of users 24 and younger.

Men in their 40s are one of the largest groups using BetterUp’s AI coaching features. “These are the groups where coaching can still be stigmatized,” says Moritz Sudhof, vice president of AI at BetterUp. But when given the chance to share their career dilemmas with a chatbot, they’re “willing to open up and expose their weaknesses and issues.”

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