As AI tools like ChatGPT become a bigger part of our daily workflows, it’s essential to pause and think about how we’re using them, especially when it comes to company and employee information.
Many people don’t realize that when you're using a free version of an AI tool, the information you put into it is often stored by the company behind the tool. In some cases, that data can be used to train future models or even become accessible in ways you didn't intend. That means if someone were to input sensitive information, like employee salaries, roles, or even details about internal projects, that data could be saved outside your control.
While some paid versions of AI offer stronger privacy protections, the risk is real whenever an AI tool is used without clear policies in place.
For HR teams and business leaders, this is especially concerning because we handle some of the most confidential information in the organization. Accidentally sharing private employee data or company plans through AI could open the door to compliance violations, legal issues, or a serious breach of trust.
When someone uses a free version of tools like ChatGPT (or other AI models):
By contrast, paid, enterprise, and API versions usually have:
👉 Example: Some workspaces clearly states, "OpenAI doesn't use [Name of Workspace] workspace data to train models." That's a big protection.
Here's where things get serious, especially for HR teams:
Data leaks Sensitive employee data (like salaries, grievances, or investigations) could be stored by a third party without control. An employee types, "Write a termination letter for Jane Doe who is being let go for misconduct" — that's now saved somewhere else.
Confidential IP exposure Business strategies, plans, or proprietary ideas could be leaked. Someone asks ChatGPT to help draft a confidential M&A announcement.
Compliance violations Especially under laws like GDPR, HIPAA, or CCPA, improperly handling employee or customer data can lead to fines. Sharing health information or PII (personally identifiable information) could trigger legal consequences.
Employee trust issues Employees expect HR to keep their data private. If AI usage compromises that trust, it could hurt morale and cause legal risk. An employee learns their compensation details were shared into a public AI tool.
Misuse by employees Employees using public AI for shortcuts (like writing offer letters, performance reviews) without security practices can unknowingly expose the company. A recruiter copies candidate evaluations into a free AI tool to "make the writing sound better."
AI can be a huge asset to HR — but only with the right guardrails.
Without precautions, you could be unintentionally airing your company's laundry in public. HR holds some of the most sensitive data in an organization, and using AI without careful protocols could mean serious legal, ethical, and reputational risks.