How Is AI Changing the Way Small-Business Employees Do Their Jobs?

BIZTECH: How has working at a small business changed in the past few years?

MCCABE: Well, there’s so much variation, both by size and by industry. What hasn’t changed for these businesses are their top priorities, which — according to every survey we do — are about doing a better job of attracting and retaining customers, improving employee productivity and controlling costs. Those things are always at the top of the list, of course.

What I think has changed, though people are starting to get used to it, is the volatility out there. There are a lot of things at the macro level that small businesses can’t control, such as inflation, recession, trade issues, supply chain issues and cybersecurity. And we’ve definitely seen that this inflation/recession double whammy thing is just continuing to plague them since we’ve come out of the pandemic. During the pandemic, top of mind was, how are we going to keep business going when people couldn’t go into their physical location? Now, it’s really the economy and trying to navigate through whatever the next twists and turns are going to be, which aren’t always easy to predict.

BIZTECH: It seems like businesses are more productive than ever. Are people just working harder, or is technology making that possible?

MCCABE: It’s a mixed bag. In the study we just wrapped up, we definitely see that except for very small businesses of under 10 employees, AI adoption is really picking up. The vast majority of SMBs are using it or planning to use it — and AI is just the latest in a lot of technology trends. A lot of them are already reaping the benefits of automation through different applications they’re using to run their businesses. But unlike 10 or 15 years ago, when a lot of SMBs didn’t view technology in general as a business accelerator, that’s really flipped on its head. It’s clear from our surveys that SMBs understand they need to use technology to stay in the game, to stay competitive.

Now, we’re seeing that AI is kind of turbocharging that. So, we definitely see that those stereotypes of the old days of small businesses being technology laggards — no, they definitely get it.

The problem that remains is they don’t have a lot of time, the skills, the people, the resources, whatever, to take advantage of what’s new. So, they don’t know enough about it, or they don’t feel they have the skills they need to use it, or they don’t understand what the use cases are for them. And security and privacy are still big concerns. If they use some new technology and new application, is it going to be safe? And then, of course, as always, “We don’t have enough time, we don’t have enough money, we don’t have enough skills.” So that’s always limited them, and I think that continues to be a challenge for a lot of smaller companies.

BIZTECH: What are the big headlines in your AI survey?

MCCABE: In June, we surveyed small and medium-sized businesses about their current adoption of AI, their plans, what they see, the benefits and risks, skill gaps, trust levels, what they’re doing to build up their AI capabilities, and the business areas they’re using or planning to use AI in.

We also asked whether they’ve replaced or are planning to replace employees.

The smallest firms are the ones most likely to be on the sidelines, and it’s because of those things we talked about before: Not enough time. People are spread very thin, so gearing up for AI is harder at the lowest end. And certainly, the skills and the knowledge gap, especially in those companies with fewer than 100 employees — they definitely need help to bridge that gap.

Overall, though, AI adoption is accelerating among SMBs. Only 18% had no plans at all to use AI.

We asked all the ones that are already using it, “How is it helping you?” And the top areas are productivity, collaboration and improving customer satisfaction. So, one of the big findings across all the business areas — and we asked about financials, customer relationship management, human resources, etc. — the top areas they’re using AI in today tend to be more pragmatic and practical and tactical.

The benefit from AI today is more productivity, better collaboration, those kinds of things. But they also do see, when they look down the road, that it’s going to help them with planning and forecasting. It is delivering value, but for a lot of them, that’s still in the future.

BIZTECH: Do they plan to replace employees with AI?

MCCABE: Of the 52% that are already using it, 16% say they have replaced jobs with AI. And that’s forecast to jump to 25% within a year.

BIZTECH: Wow. Those are significant numbers.

MCCABE: I know. It gets down to doing more with less. It’s not all layoffs: Now, it could be that somebody left and the company didn’t rehire for that position. And it could also be that an employee who was spending a lot of time processing invoices and expense reports gets moved into something else thanks to AI-powered automation. But it’s definitely having an impact on jobs, and it’s going to -continue, just like the big companies we keep reading about.

And I think the smart companies, whether you’re a large company or a small company, they’re saying, “Well, OK, this is going to impact how work gets done. Where can I take the employees that are good employees, they perform well, they’re trustworthy” — all those things you want — “how can I reskill them?”

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BIZTECH: Do small businesses see AI as a competitive advantage, or as another thing to be used against them?

MCCABE: We asked about whether AI is delivering value, and it definitely is. Our take is, AI can be a great leveler for smaller companies if they can overcome those issues we talked about with respect to the skills, the costs, the time and resources. In a smaller company, it’s much easier to get focused on where you need operational improvement and strategic planning improvement, let’s say, and kind of focus in and do that. Large companies have all these different departments and people and processes to get something rolling. At least in a small company, you can say, “Hey, the first thing we really want to solve with AI is X,” and then go after that. And it doesn’t mean it’s easy, but you can usually do it more quickly.