UK companies are increasingly adopting AI to improve productivity and enhance day-to-day operations, according to new analysis of government data based on analysis from Fasthosts.

New data from the Office for National Statistics (ONS) show that firms are using AI primarily to automate routine tasks and strengthen existing teams, rather than replace workers.

Researchers found that the most common use of AI inside organisations is improving business processes, with larger employer leading the shift. Adoption has accelerated sharply over the past year, rising from 12% of businesses with 10 or more employees in late 2023 to 35% today.

The findings also show that fears of widespread job losses are not being realised. Fewer than 10% of firms say reduced headcount, and around half report no staffing change at all.

At the same time, AI is not yet driving significant hiring, with only around 1% of the smallest and largest businesses say they have increased headcount directly because of AI.

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Instead, companies are investing in their existing workforce. More than 60 per cent are training or reskilling employees to build AI capability, with medium and large organisations reporting strong uptake of AI skills programmes.

“AI tools are increasingly being embedded into small and midsize businesses in order to remain competitive, however, this fast-paced technological change means digital skills are no longer a ‘nice to have’, but critical for business growth,” Richard Bovey, chief for data at AND Digital said.

“By equipping SMB employees and business owners with essential AI and digital skills, it will enable them to thrive today’s workplace.”