Artificial intelligence is creating a new competitive question for small businesses. What happens when revenue can grow without payroll growing alongside it?

Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

The PYMNTS Intelligence report “New Data Shows Small Businesses Use AI to Grow Without Hiring,” part of the SMB Growth Monitor, found in October that 60% of small- to medium-sized businesses (SMBs) using AI said they can produce more without adding employees. Among growing businesses, 16% reported skipping a full-time hire because of AI, compared with 10% of businesses experiencing flat revenue.

The findings suggested that AI’s most consequential labor market impact may not be the employees that companies eliminate, but the positions they no longer need to create. As automation makes routine work cheaper, the same forces reducing demand for labor may be creating a new market for human judgment and accountability, something harder to automate.

Small business expansion has traditionally carried a predictable financial consequence. More revenue generally meant more people to serve customers, process transactions, manage operations and deliver services.

Rather than replacing entire departments, businesses can use automation to absorb incremental workloads that previously justified additional hiring. A company might handle more customer inquiries, produce more marketing materials or reconcile more transactions without expanding its workforce.

Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

Source link