Smaller firms use AI training to recruit & keep staff

General Assembly has published research suggesting small and medium-sized businesses are using AI upskilling to attract and retain staff.

The study found employers viewed role-specific AI training as the most effective approach.

The findings are based on a survey conducted in June and July of 526 Human Resources and learning and development leaders at companies in the United States and the United Kingdom with 50 to 999 employees.

According to the research, 81% of Human Resources leaders at smaller employers said lay-offs and benefit reductions at larger companies had made it easier to recruit and retain talent. Nearly half, 47%, said they had hired staff from larger firms in the past year.

AI is also changing how these businesses approach hiring and workforce development. The research found 66% of respondents had changed their talent strategies because of AI, while 30% said they were hiring more people because of opportunities linked to the technology.

Two in five respondents, or 40%, said they had passed over an otherwise qualified candidate because the person lacked AI skills. At the same time, 67% said they planned to hire for additional roles by the end of the year, and 72% said they now include AI training in onboarding and training for new recruits.

Hiring shift

The study suggests smaller employers treat AI more as a workforce issue than a cost-cutting tool. While 43% said their main objective was to save time and 36% said it was to support growth, only 21% said reducing costs was the primary reason for adoption.

A skills shortage remains the main obstacle to wider adoption. Nearly a third of respondents, 32%, said it was their biggest challenge in scaling AI use.

Many employers are responding by investing in both tools and training. The research found 77% had invested in AI tools or platforms for employees, while 70% had invested in AI skills training.

Success measures also appear closely tied to workforce outcomes. More than half of respondents, 53%, said employee satisfaction and retention were the main indicators that their AI investments had worked, ahead of scaling ability at 43%, improved customer satisfaction at 41%, reduced costs at 41% and employee usage volume at 32%.

Most companies surveyed said they were trying to close AI skills gaps by training existing staff rather than relying mainly on external hiring. The report found 64% were upskilling current employees, 25% were hiring new talent with AI skills and 11% were using consultants or agencies.

Professional development also remained a broader theme in the findings. Sixty per cent of respondents said they offer professional development, education and training benefits, and 26% said they plan to increase investment in those benefits.

Training focus

Among surveyed employers, 51% offer role-specific AI training for individual teams or departments, compared with 50% offering tool-specific training. Some 35% provide a stipend or reimbursement for training outside work, while 44% allow staff to experiment with AI during working hours.

Only 3% said they offered no AI upskilling opportunities at all.

When asked which method worked best, 35% chose role-specific training, compared with 26% for tool training, 21% for reimbursed external training and 18% for experimentation on the job.

The report defines role-specific AI training as instruction tailored to how staff use AI in their own functions, such as marketing, engineering or Human Resources. That could include campaign analysis and content generation in marketing, or recruiting workflows and talent analytics in Human Resources.

"Growth-stage companies see AI adoption as a catalyst, not a cost-cutting exercise," said Daniele Grassi, Chief Executive Officer of General Assembly.

"They're able to move faster to implement AI and scale it quickly, and they're upskilling their workforces accordingly. As talent sees daily headlines around layoffs and benefit reductions, they're increasingly looking for opportunities with organizations that see human talent as critical to AI transformation. SMBs are seizing the moment," Grassi said.

The data also points to uneven adoption across different forms of AI. While 71% of respondents said their organisations use generative AI, fewer than half, 46%, said they use AI-driven automation, and 30% said they use agentic AI.

Spending patterns show that more money still goes into technology than training. On average, respondents said 46% of AI spending went on tools, compared with 34.5% on employee training.

General Assembly argues this leaves room for smaller businesses to deepen AI use through more targeted workforce investment.

"It's great to let employees experiment and pursue learning opportunities that interest them, but what we really see, across companies of all sizes that we work with, is that role-specific training has the biggest impact on AI transformation," Grassi said.

"Companies are going beyond AI literacy to ensure employees know how to apply AI within the specific workflows of their roles, and how to do so responsibly and strategically," he said.

A later section of the research links this approach to more advanced forms of adoption, particularly where businesses want staff to move beyond basic use of generative AI tools.

"Company-wide role-specific training can help unlock more advanced use cases of AI, such as agentic workflow automation," Grassi said.

"SMBs who invest more into training their workforces are poised to recruit and retain high-potential talent so they can grow and scale faster. In today's business landscape, the right AI skills are the competitive advantage that wins," he said.