Job prospects for Generation Z could come under further pressure in the new year, as almost half of UK SMEs expect to hire fewer people as they ramp up investment in AI, Rathbones, one of the UK’s leading wealth and asset management groups, has revealed.
A poll of 1,024 small and medium sized (SME) founders, owners, and senior executives for Rathbones found that 29% are already using AI in their business, with a further 28% planning to adopt it in the future. Among those already using AI, one third have reduced hiring of graduates or entry-level staff, although 62% say AI has had no impact on hiring so far.
The biggest impact however lies ahead, with almost half (46%) of executives of SMEs expecting to cut back on hiring as they make greater use of AI, and 16% predicting a significant reduction. The roles most at risk from further AI adoption include data analysis and reporting (50%), customer service and support (48%), and IT and software development (41%) [see Notes to Editors].
Rathbones’ findings comes as recent employment data reveals almost a million (946,000) young people (aged 16 to 24 years) are out of work, education or training.
Stephanie Ebner, a Financial Planning Lead at Rathbones, says: “AI adoption isn’t just a big business trend – it is increasingly filtering down to SMEs, and that could create a vacancy black hole for young jobseekers. Many employers now face a brutal choice: hire and train a graduate or deploy AI that can do most of the job instantly.
“With 5.68 million* people employed by UK SMEs, these businesses have a pivotal role in shaping the future of work. But there’s a fine balance to strike: boosting efficiencies, productivity and profits must not come at the expense of building the UK’s skills pipeline or giving young talent a fair start.
“The business owners across the country we speak to want to create opportunities for young adults yet cost pressures - from tax changes such as increase in employer national insurance to broader inflation - are the biggest blockers. Tackling these challenges is essential if we’re to avoid widening generational inequality,” Ms Ebner added.
Other key findings:
Around a quarter (25%) of SMEs believe greater adoption of AI will complement rather than replace roles, while a further 20% are unsure of the impact.Around one in eight (13%) say AI is not applicable to their business, while 30% are not considering using it.
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