Smaller Firms Use AI Training to Recruit & Keep Staff

Research by General Assembly reveals that small and medium-sized enterprises (SMEs) are increasingly adopting AI upskilling initiatives to attract and retain employees. The study is based on a June-July survey of 526 HR and learning and development leaders from companies with 50 to 999 employees in the US and UK.

Key Findings from the Survey

The report highlights role-specific AI training as the most effective method for boosting recruitment and retention. Notable insights include:

  • 81% of HR leaders from smaller firms believe layoffs and benefit cuts at larger companies have improved their ability to recruit and retain talent.
  • Nearly half (47%) indicated they hired staff from larger organizations in the past year.
  • 66% have adjusted their talent strategies due to AI advancements, with 30% increasing hiring related to AI-driven opportunities.
  • 40% have turned down qualified candidates who lacked AI skills.

AI Training and Workforce Strategy

A majority of SMEs now include AI training in onboarding programs (72%) and plan to create more AI-related roles by the end of the year (67%). Unlike approaches that focus solely on cost reduction, these firms prioritize AI adoption to save time (43%) and support growth (36%). Cost-cutting remains a less significant factor (21%).

Skills shortages present a major challenge, with 32% citing this as the biggest barrier to expanding AI use.

To address this, 77% of SMEs have invested in AI tools and 70% in staff training. Over half (53%) measure the success of AI investments through employee satisfaction and retention, rather than just cost savings or customer satisfaction.

Preference for Upskilling and Training Formats

Most companies prefer upskilling existing employees (64%) over hiring new AI-skilled talent (25%) or relying on consultants (11%). Professional development offerings are common, with 60% providing education benefits and 26% planning to increase such investments.

Regarding training formats:

  • 51% offer role-specific AI instruction tailored to particular teams or departments.
  • 50% provide tool-specific training.
  • 44% encourage AI experimentation during work hours.
  • 35% support funding for external training opportunities.
  • Only 3% currently have no AI upskilling programs.

Effectiveness of Role-Specific Training

Role-specific training — focusing on applying AI within particular job functions like marketing or HR — was deemed most effective by 35% of respondents. This aligns with trends toward advanced AI applications beyond basic generative AI use.

Industry Perspective

General Assembly CEO Daniele Grassi noted that growth-stage SMEs view AI as a tool for advancement rather than cost cutting. With frequent headlines highlighting layoffs and benefit cuts in larger companies, employees increasingly seek organizations that prioritize human talent alongside AI transformation.

The survey also found uneven AI adoption levels:

  • 71% of companies use generative AI.
  • 46% apply AI-driven automation.
  • 30% use agentic AI.

Budgets still favor technology acquisition (46% of AI spending) over training (34.5%), indicating potential for businesses to strengthen AI capabilities through workforce development.

Grassi emphasized that companies progressing beyond basic AI literacy invest heavily in role-specific training. This prepares employees to use AI strategically and responsibly, unlocking AI’s full potential including complex applications such as agentic workflow automation.

Summary

SMEs investing in AI training position themselves to attract and retain high-potential talent while accelerating growth. The research underscores AI skills as a critical competitive advantage in today’s business environment.

Key Takeaways

  • AI upskilling is becoming a key strategy for SMEs to recruit and retain employees.
  • Role-specific AI training is viewed as the most effective approach.
  • Many SMEs prioritize saving time and supporting growth over cost reduction when adopting AI.
  • Skills shortages remain a significant barrier to expanding AI use.
  • Upskilling existing staff is favored over hiring new AI talent or consultants.
  • Investment in AI training and tools correlates with improved employee satisfaction and retention.