A recent study by Small Business Britain and global hiring platform Indeed has revealed a significant trend in the adoption of artificial intelligence (AI) among small businesses, with over a third (38%) currently using AI or considering its implementation.

The research, presented in a white paper titled ‘People for Business,’ showcases the growing interest of the UK’s 5.5 million small businesses in embracing cutting-edge technology.

Despite the enthusiasm for AI, the study highlights the need for support and upskilling among entrepreneurs, as only 22 percent of small business owners claim to understand how to best integrate AI into their operations.

This knowledge gap suggests that there’s potential for small businesses to harness AI more effectively in the future.

The research provides encouraging insights into the future of small businesses, with only 6 percent of business owners reporting staff reductions due to AI implementation.

This modest decrease in staff is offset by the 10 percent of business owners who have created new roles to manage digital technologies within their companies. These findings indicate a strong commitment to retaining and retraining employees while incorporating AI to enhance productivity and efficiency.

What about the demands for flexibility?

Small businesses are also adapting to the demands for flexibility in the post-COVID era, with 84 percent now offering flexible working arrangements. This shift reflects a growing trend towards remote and flexible work options, providing employees with a better work-life balance.

Michelle Ovens CBE, the founder of Small Business Britain, commented on the research, stating, “It is really encouraging to see this high engagement around AI amongst business owners. This type of technology can be a positive force to boost small businesses – but it relies on enhancing the knowledge, understanding, and confidence of entrepreneurs to make the most of it.”

Sanjay Aggarwal, co-founder of Spice Kitchen, a small business that has experienced substantial growth since its inception in 2012, echoed this sentiment: “As a small business, we see AI as an ally, not a challenge, and I’m genuinely excited about its potential. We are in the very early stages of implementing it into our operations, particularly within our marketing and communications team and recruitment.”

The interest in AI continues to grow…

Bill Richards, UK Managing Director at Indeed, highlighted the growing interest in AI among businesses and the need for understanding its potential. He explained, “While many small businesses have already adopted the technology, our research suggests that millions of business owners lack the understanding to harness its potential and therefore risk missing out on efficiency and productivity benefits.”

AI also plays a crucial role in streamlining the hiring process for small businesses. Indeed’s AI-powered matching technology simplifies the candidate-employer connection, allowing business owners to focus more on human experiences and interactions.

In addition to AI adoption, small businesses are embracing other key workforce trends, with 78 percent offering flexible working hours and 35 percent enabling staff to work remotely. These changes are essential for attracting and retaining talent while accommodating the diverse needs of the workforce.

However, despite these positive trends, 25 percent of small businesses still find recruitment “very difficult.” Hiring challenges have been cited as a hindrance to growth by 50 percent of business owners. Nevertheless, the report indicates that small businesses are showing resilience in the face of economic turbulence, with 89 percent expressing confidence in the future.

Michelle Ovens added, “The shift towards flexibility in hiring can only be a good thing for opening the talent pool and creating a more diverse and inclusive workforce.”

As small businesses continue to adapt to the evolving business landscape, AI remains a valuable tool for enhancing efficiency and innovation while retaining the essential human element that defines their character.





Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.