AI Boosts Small Business Productivity, But Employee Training Lags Behind

Key findings

• 42 percent of small to medium-sized businesses are already using AI, and more than half of these companies report financial savings as a result. 
• Almost three-quarters of employees agree AI has enhanced their productivity, and 60 percent feel more satisfaction at work. 
• Only 52 percent of companies using AI are training their employees in the technology.
• More than half of employees feel they need more AI training, and only 37% of SMB employees expressed confidence in their AI skills.
• Though 90% of employees who received AI training reported better performance, only half of SMBs have trained their employees or established AI usage policies. 

AI adoption among small businesses is rising fast 

The rise of companies adopting AI technologies like machine learning, natural language processing, and computer vision has been sharp. However, a National Bureau of Economic Research paper showed that only six percent of U.S. companies were using AI in 2017, mainly in large companies in healthcare, manufacturing, or IT. 

In stark contrast, our research shows that 42 percent of small to medium-sized businesses (SMBs) have invested in artificial intelligence, an increase over 2023. ChatGPT is mainly responsible for this uptick, marking a significant internet milestone when it amassed one million users within its first five days. 

While ChatGPT is far from the only AI tool available, this conversational platform has brought generative AI to the forefront of public attention and shown the world what machines can produce from a simple prompt. 

Which workers are adopting AI the fastest?

In companies that have already adopted AI, 68 percent of workers are using the technology. Though young people are often early adopters of new technology, we found that Gen Z workers use AI at work less often than their millennial and Gen X colleagues. This could be due in part to the types of roles young professionals hold at the beginning of their careers.

We also discovered male workers are more likely than female workers to use AI. This aligns with an earlier business.com study, which revealed a similar gender gap with ChatGPT usage in the workplace. The University of Chicago also reports a difference between men and women regarding ChatGPT usage. Their researchers found that women are 20 percent less likely to use ChatGPT at work than men in the same occupation, even though men are 11 percent likelier to be restricted by their employer. The most revealing statistic is that 48 percent of women report needing training to use the technology, compared to just 37 percent of male employees. [Learn how to build an online business according to ChatGPT.]

Nevertheless, the future looks bright for AI adoption. business.com’s research revealed that 30 percent of the SMBs that still need to adopt artificial intelligence plan to invest in it soon. This signals that any initial fears over AI have been overwritten by excitement about its potential. 

How SMBs are implementing AI 

Small to medium-sized businesses are still in the exploratory stages of using AI. This is apparent in our data, which reveals that 77 percent of SMBs choose tools pre-equipped with AI elements. Why? It’s an easy switch to experiment with AI functionality in a platform they already use. For example, project management tools like monday.com or ClickUp have built-in AI, allowing users to speed up tasks like drafting emails or product documentation. Once employees are comfortable using these add-on features, adopting a dedicated AI tool into their workflows is less challenging. [Check out our monday.com review to learn how it can help your business.] 

How does AI support different business functions? 

AI usage is as vast and varied as the teams it supports. Here are just a few business functions leaning on AI in their routine tasks and projects: 

Top business functions where small-to-medium companies use AI
Among companies that have begun to implement AI

While AI is often linked to tasks involving analytical thinking and problem-solving, such as data science or cybersecurity, our data shows it’s also used in more creative and people-oriented activities like marketing and customer service. 

Some SMBs are deploying AI-powered chatbots to answer customer queries round the clock, while marketing trainer and consultant Elizabeth Taylor swears by feeding a customer persona template into Google Gemini to create profiles that shape targeted marketing campaigns. “For years, I relied heavily on intuition and limited data to create these profiles. That all changed when I leveraged AI in my persona creation process. The initial output is usually good, but I always follow up with additional questions to add depth to the persona.”

SMBs are concerned about AI compliance 

As SMBs quickly harness AI to improve efficiency across their organizations, they’re also hurrying to develop training and AI usage policies this year. Here’s what we discovered: 

• 52 percent of companies are training their employees to use AI. 
• 51 percent are communicating with stakeholders such as customers and business partners about their use of AI at work. 
• 50 percent are creating an AI usage policy. 

These critical activities build guardrails around how employees rely on technology to complete their workloads, providing information on what is and isn’t allowed. 

Inputting sensitive employee or client data into a prompt is a top concern. AI systems learn from human-fed data sets, including the questions and prompts that users type in. This collection, processing, and storage of sensitive data could have significant legal implications for companies of all sizes. For example, SMBs using generative AI to craft performance reviews must understand whether entering employees’ personal details into a tool is legal and ethical. 

Business leaders should always consult legal professionals while developing AI use policies, specifically concerning the General Data Protection Regulations, the California Consumer Privacy Act, and any local or industry-specific compliance regulations. 

How are workers and employers benefiting from AI? 

AI has proved highly beneficial for companies of all sizes when implemented with proper training and usage guidelines. Initial fears that AI will phase out human employees currently appear unwarranted. Employers view artificial intelligence as providing numerous advantages beyond lowering their wage bills, as evidenced by our data in the table below. 

Percent of small to medium businesses experiencing various AI benefits, by level of implementation 

For companies that use AI in one business area, time savings are the top benefit, experienced by 73 percent of respondents. When companies save time, this goes hand in hand with the financial savings reported by 55 percent. AI-generated insights also resulted in stronger decision-making for 60 percent, as the technology can generate key insights and predictions at speed then present them in an array of visual charts. A further 68 percent felt that artificial intelligence produced a better customer experience; for example, cosmetics company FC Beauty leverages the technology to create personalized product recommendations for its customers. 

The benefits of AI were even more pronounced for companies that had implemented it more extensively. For example, 93 percent of organizations that had implemented AI in at least four different business functions reported saving time, saving money for 83 percent of them. 

Research by the Small Business & Entrepreneurship Council takes a closer look at the impact of these resource savings. When AI is deployed in small businesses, owners report it does the job of 2.1 full-time employees and 1.5 part-time employees. By making these time savings on human capital, 25 percent of companies are able to increase employee wages and benefits, 20 percent pay down company debt more quickly, and 25 percent set aside extra capital for emergencies. 

Employees also report numerous benefits when they incorporate AI in their work. 73 percent of workers reported increased productivity due to AI, while 60 percent said they felt more satisfaction in their work thanks to AI tools. These improvements are likely because AI is excellent at eliminating repetitive tasks like sending email notifications or updating project management boards, which eat time and require constant tab-switching. When AI handles these mundane tasks, users can explore more creative sides of their roles. One Microsoft paper sums it up, with 23 percent of employees reporting that AI means they’ll never have to absorb unnecessary or irrelevant information again. 

The data clearly shows that employees still need to understand more about using AI to maximize its value in their specific roles. Only 41 percent of employees prioritize AI training, while the same percentage have yet to make the same commitment to learning. [Find out how to improve the transfer of learning in the workplace.]

Employees need more AI training to reap its benefits fully 

Artificial intelligence implementation is too fast for many of the employees we surveyed. Only 37 percent of all SMB employees express confidence in their AI skills, and 54 percent believe they need more training in the technology. When employees don’t receive training, they’re less likely to use AI frequently, as demonstrated in the table below: 

AI use frequency at work, by training received

AI isn’t a checkbox exercise – only companies willing to commit to a culture of lifelong learning will fully master and keep up with its evolution. Those who don’t will experience a knowledge gap that prevents them from reaping the full benefits of this powerful technology. The good news is that 90 percent of SMB employees who have received training from their employer report it makes them better at their role. 

The top ways people received AI training in the past 12 months are spread across several categories, as follows: 

On-the-job training enables employees to practice prompts and receive outputs relevant to their roles, explaining why this is the most popular learning method. In second place, online courses and certifications, such as those offered by LinkedIn or Coursera, are easy to complete alongside employee workloads. [See which courses we recommend to prepare for the future of business.]

Networking with AI experts and coaching from experienced professionals were less popular training methods, perhaps highlighting a lack of AI specialists available to approach for this type of training.  

Overall, sentiment towards AI is very positive, with 90 percent of SMB employees keen to continue upskilling by taking company-provided AI training. This far outweighs the 24 percent who feel the technology is more trouble than it’s worth and the 27 percent who believe that learning AI has increased their workload. 

Our data 

In August 2024, business.com conducted an online poll of 1,175 American adults who worked for small-to-medium businesses with less than 250 employees across all branches, locations, and offices. 81 percent worked full-time and 19 percent worked part-time. 16 percent worked for a company with less than 10 employees, 36 percent worked for a company with 10-49 employees, and 48 percent worked for a company with 50-249 employees. The median profit of these businesses was $1 million in the last 12 months.

Of the respondents, 48 percent were female, 51 percent were male, and 1 percent did not disclose their gender. In terms of ethnicity, 64 percent were white, 17 percent were black, 9 percent were Asian, and 10 percent were mixed race or another ethnicity. Respondents ranged in age from 18-82 with a median age of 36.