Some smaller employers say layoffs and benefit reductions at larger companies are widening their access to talent, while AI proficiency is influencing which candidates they hire.
General Assembly, a workforce training provider, surveyed 526 human resources and learning-and-development leaders at U.S. and U.K. companies with 50 to 999 employees in June and July.
It found 81% said cuts at larger companies had made recruiting and retention easier, while almost half said their company had hired from a larger organization in the previous year.
A larger talent pool does not appear to mean smaller employers are lowering their hiring criteria. AI skills affected screening decisions for some respondents, with 40% saying they passed over an otherwise-qualified applicant who lacked AI skills and 30% saying they were hiring more because of AI-related opportunities.
Employers prioritize upskilling over new hires
Upskilling existing staff was more common than hiring externally to close AI skills gaps. AI training was part of new-hire onboarding for almost three quarters of respondents, while 64% identified upskilling existing employees as their primary approach. Respondents allocated 46% of average AI budgets to tools and platforms, compared with about 35% to employee training.
Federal data backs small business hiring strength
Preliminary, seasonally adjusted U.S. Bureau of Labor Statistics data show smaller establishments had higher hire rates than establishments with 5,000 or more employees in June. The hire rate was 4% at establishments with 50 to 249 employees and 3% at those with 250 to 999 employees, compared with 2% at establishments with 5,000 or more workers.
The Job Openings and Labor Turnover Survey figures do not show whether workers moved from large companies to smaller ones or why a hire occurred.
Conflicting forecasts on AI and hiring demand
The AI evidence points in more than one direction. A Federal Reserve Bank of Atlanta survey of senior U.S. business executives found firms expected AI to reduce hiring demand over the next 12 months by 0.8% for workers with college degrees and 1.1% for workers without them. It also found the largest AI investments were concentrated in bigger firms.
Methodology differences and data limitations
The surveys measure different populations and outcomes. General Assembly records what leaders at 50- to 999-employee companies in two countries say they are doing. The Atlanta Fed measures expected changes in overall hiring attributable to AI across U.S. firms, so the percentages are not directly comparable.
General Assembly has a commercial interest in the training findings because it sells AI skills programs to employers.