The latest survey results from the Principal Well-Being Index showed that most small and medium-sized businesses expect AI to be a growth driver going forward, while only a minority of firms expect it to result in lower staffing and wage levels. This suggests that upskilling and retraining will likely play a significant role in labor markets over time, and that AI’s role in supporting employment growth should remain broadly positive and lead to stronger economic growth going forward.
The latest Principal Well-Being Index showed that adoption of Artificial Intelligence (AI) technology by businesses has not led to planned decreases in staffing or wages, challenging fears of widespread AI-driven job losses.
The Principal Well-Being Index, now in its twelfth year, tracks sentiment across small and medium-sized businesses. The latest survey was conducted from September 26 to October 17, gathering responses from 1,000 businesses—comparable in scale to the NFIB Small Business Optimism Index.
AI’s potentially outsized impact on productivity has sparked concerns about widespread layoffs and slower wage growth. However, the survey results indicate the opposite: most firms view AI adoption as a catalyst for growth, rather than a threat. Indeed, AI’s perceived long-term impact appears to extend beyond simple labor-cost savings, as AI-induced productivity gains are expected to be the dominant driver behind margin expansion over time.
The survey supports the notion that for those currently employed, upskilling and retraining is more likely than being replaced by AI. Of course, it’s important to keep in mind that as AI adoption remains in early stages, its longer-term net effect on the labor market remains uncertain, especially for entry-level workers fresh out of university. Yet, to the extent AI compliments—rather than substitutes—human capabilities, its role in supporting employment growth should remain broadly positive and lead to stronger economic growth going forward.
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The WBI is recurring research used to track sentiment around repeated financial health measures and timely issues relevant to small and midsize businesses and their employees. Business owners, decision makers, and business leader participants who represent companies with between 2 to 10,000 employees and offer health insurance and/or retirement benefits provide information by completing a 15 minute online survey. Research is also conducted with an employee audience of those 18 and older who are employed full time and have an employer who offers health insurance and/or retirement as a sponsored benefit. Access to sample is provided by Dynata, a third-party research panel provider.
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