Research shows that small and medium-sized businesses using AI are hiring more employees as sales increase. Here’s how to get started:
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Four witnesses testifying before the House Small Business Committee this week challenged the commonly held belief that artificial intelligence will replace human workers, arguing that small businesses that use AI will likely eventually have to hire more workers as they grow.
Jordan Crenshaw, senior vice president of the U.S. Chamber of Commerce’s Technology Engagement Center, said the majority of small and medium-sized businesses are already using AI for a wide range of purposes. Last year, 58% of small businesses nationwide reported using generative artificial intelligence, up from 40% in 2024 and 23% in 2023, he told lawmakers. But the real surprise, he added, is that 82% of small businesses that reported using AI increased their headcount in the past year. “These companies are not using AI to replace people,” Crenshaw said. “We use this to help our employees focus on high-value work that requires judgment, creativity, and relationships.”
So what is the best way for small businesses to adopt AI?
- focus on what you are do not have If you do it now, your sales could increase. “So many small businesses don’t have a website,” said Chike Aguh, director of innovation and strategy at the Kapor Center, which promotes technology inclusion. “So many small businesses don’t advertise in any way because they can’t hire designers. AI can do those things.” It’s not just about websites, it’s also about mindset. “Small businesses need to ask themselves, ‘What can AI do that isn’t happening in my business?’ and ‘What can someone else do that is happening right now?'” Agu told lawmakers.
- Start with what needs to be fixed. “I always advise companies to start with the problems that are most familiar to them. What is bothering them every day? Start there,” said Frans Hoang, founder and CEO of BoodleBox, an AI company that creates an online space where education, legal, and business teams can safely and collaboratively use AI tools. He cited Tekeya Gaines, owner of a small coffee company in Detroit, who said she used AI to more accurately price her products and enhance her marketing efforts. As a result, Gaines’ average order value rose from $38 to $47, Huang said.
- Invest in training your employees on Al and listen to their ideas. Rather than replacing workers with AI, Agu said companies should invest in training employees on how best to use new AI tools, and even consult employees about where and how to leverage AI.
- Think of AI as a power multiplier. “AI is a power multiplier that helps small businesses accomplish more with limited time, people and resources. For example, retailers can use AI to understand demand and personalize marketing,” Crenshaw said. Restaurants can improve their schedules and inventory. Professional services companies can automate routine drafting and surveying. Manufacturers can reduce waste and improve operations. ”
- Make your back office more efficient. Agu said small and medium-sized businesses are already finding that AI can help with back-office tasks such as accounting, tax payments, bookkeeping, marketing and sales lead generation.
- Use AI to simplify onboarding and training new staff. Anthony Kaiyum, owner of Chicago-based Merz Apothecary, told committee members that he recently used AI voice transcription and transcription tools to create a months-long onboarding program for new employees. “She told me later that this was the clearest roadmap she had ever received when starting a new job,” he said.
- Choose the right AI tool for your business. There are currently a variety of AI models available online at low or no cost, with different strengths and weaknesses. It’s important for users to know which model is best suited for the job they want AI to tackle. “It’s tempting to believe that everything is a nail, amenable to the AI’s hammer,” Agu says. “It’s really important to help these small business leaders choose the right hammer for the right nail. It could be a Claude or it could be a ChatGPT.”
- Find a reliable and secure AI system. The more candid business owners are with AI systems about their internal finances and sensitive data, the more useful AI models will be for companies. Therefore, it is important for business owners to find an AI system that they feel is safe. “AI is only as good as the information that goes into it, the context. Many companies are afraid to input their own data, which is unfortunate because it is important to do so to get the best results from AI,” Hoang says. “Find a platform that allows you to use your data with privacy and security.”
- Look for AI accelerators, coaches, and government-funded training. Experts agreed that more AI literacy programs are needed to properly educate entrepreneurs on how to best utilize new models, and emphasized that such resources are already available, such as the U.S. Chamber of Commerce’s Small Business Foundation Program. “For those of us who are athletes at any point in our lives, we never read a book about how to do a jump shot or throw a football. We did it on the field with our coaches,” Agu said. “AI ironically points to the need for more work in the field and in the workplace. Classes are good. Real-life experience is even better.”
- Consider paying for AI if you need it. There has been great progress and competition in AI in recent years, and while there are plenty of tools available online for free, some of the more advanced and valuable tools still come at a cost. Depending on the job, it may be worth the money. “Basic AI is cheap and ubiquitous,” Huang said. “Premium AI that delivers real results remains costly, creating a new rift between Wall Street and Main Street.”
Qaiyum also told lawmakers that since the company started leveraging AI more aggressively, it has increased its workforce by 20%, from 50 to 60 people. “We think of (AI) as a set of tools that will help us improve our capabilities and hire more talent,” Qaiyum said. “Currently, we are building an AI agent to handle routine accounts payable tasks that take a single employee more than 20 hours a week. This is the time we want our employees to use to help us solve strategic problems to grow our business.”
Qaiyum said Merz Apothecary, which sells health, beauty and grooming products, also leverages AI tools to analyze cash flow, track inventory, monitor investments, record expenses, manage payroll and monitor potential financial risks.
“And we’re still hiring,” Qaiyum said. “We’re at a stage now where we want to bring in people with more experience[in AI]because we think there’s a huge opportunity ahead.” Qaiyum reiterated that while AI is an emerging technological advantage, “humans are the enduring advantage.”
Crenshaw also warned that if Congress does not act to regulate AI and leaves the issue to the states, small businesses will suffer, creating a costly nationwide “patchwork” of business rules that will be difficult for small businesses to navigate.
He cited research from the Information Technology Innovation Foundation, a nonprofit think tank with much support from the technology sector and other large corporations. The report concluded that without national AI data privacy rules, the nation will lose approximately $1 trillion over the next 10 years, of which $200 billion will be borne by the small business community. He also cited a relatively new California law, the California Consumer Privacy Act, which was signed into law in 2020 and has since enacted rulemaking regarding AI. Crenshaw said it is currently estimated that it will cost small businesses $16,000 per year to comply with the AI portion of the law.
The bottom line, experts told lawmakers, is that AI cannot replace true human capabilities, but rather should empower workers with new tools to become more efficient, productive, and skilled. The four called on Congress to approve more funding for AI literacy training for businesses and workers, and to establish a national regulatory framework for AI models to follow, rather than the current patchwork of state-by-state regulations that are evolving in the absence of federal AI regulations.
The committee took no action on specific bills or proposals Tuesday, but several House members said they believed it was important for Congress to fund AI literacy programs through the Small Business Administration and approve some kind of national regulatory framework for AI and tech companies.
“Our goal is to ensure that all small businesses and entrepreneurs have the opportunity to succeed in the emerging era of AI,” committee chairman Roger Williams (R-Texas) said at the beginning of Tuesday’s hearing.
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