Marvin OnumonuA third of small and medium-sized businesses (SMEs) have cut graduate and entry-level jobs as artificial intelligence (AI) made its way into smaller firms, data from Rathbones revealed.
Almost half (46%) of SMEs said they would hire fewer people as they increased investment in AI.
29% of SMEs were already using AI, with a further 28% planning to bring it in.
Among those already using AI, 33% said they had reduced hiring of graduates or entry-level staff, while 62% said AI had made no difference to hiring so far.
Data analysis and reporting (50%), customer service and support (48%), and IT and software development (41%) were the roles most at risk.
The research comes as employment data showed almost a million (946,000) young people aged 16 to 24 were out of work, education or training.
Stephanie Ebner, financial planning lead at Rathbones, said: “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.”
Ebner added: “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.”.
Data also showed a quarter (25%) of SMEs said greater adoption of AI would complement rather than replace roles, while one in five (20%) were unsure about the impact.
Around 13% said AI was not relevant to their business, while 30% were not considering using it.
