AI for Small Businesses: Impact and Sentiment
Artificial intelligence is everywhere these days. Tech companies consistently launch new platforms or upgrades to existing models. Workplaces are abuzz with daily talk of AI and its impact, from productivity to privacy and from security measures to questions about job replacement.
At the same time, states are proposing legislation to provide guardrails on AI for businesses, as well as protect its citizens.
So, what are small-business owners’ and HR leaders’ thoughts on artificial intelligence? Surveying a little more than 1,100 small-business owners and HR professionals at small businesses, the 2025 Paychex State of Small Business AI Report shares data and insights on the survey results.
The biggest find is that owners of small businesses – for this survey, those employing fewer than 500 people – are optimistic, with 72% expressing a somewhat positive to a very positive attitude toward AI and 82% viewing AI technology as helpful to their business.
Not every respondent offered such praise, as 18% viewed AI as a threat. However, of those 18%, a hint more than one-quarter (26%) saw it as a threat because they said they feared being outpaced by competitors who could leverage AI more effectively.
“There is FOMO about not using AI,” said Beaumont Vance, senior vice president of data, analytics, and AI at Paychex. “However, I think businesses know that if they don’t adopt technology, they could get wiped out.”
Time Savings, Productivity, and a Key Driver
We know AI saves time. Just ask anyone who hasn’t had to wait on a phone to resolve a simple issue on their cell phone bill and, instead, got the answers required from an AI-powered chatbot in minutes. In fact, customer support is the overwhelming choice – at 64% – from respondents as to where AI is used most across their core business operations. The next five core operations are within percentage points of one another when it comes to AI use, between 34% and 42%, with employee retention lagging at 27%.
Accuracy, Privacy, and Security
In January 2025, the AI platform DeepSeek exposed more than 1 million sensitive records because of a misconfigured cloud storage instance that lacked proper access controls.
It’s not surprising, then, that the top concern for all business owners and HR leaders who participated in the survey is data privacy and security. However, it was only a concern for a little more than half of the respondents (54%), perhaps reflective of how high-ranking officials in the U.S. government ranked security as lower than cost and speed in their general assessment of DeepSeek’s overall performance.
Investing in AI
Small business owners and HR leaders have a desire to level the competitive playing field, whether that is in recruiting talent, saving money, finding efficiencies, and more. A majority (51%) of small businesses are spending between $1,000 and $9,999 a year. Even more – 62% – of owners and HR leaders said they plan to spend between $1,000 and $9,999 on AI technology in 2025, while 90% overall plan to invest in some AI in 2025.
The business operations that small business owners and HR leaders plan to invest in throughout 2025 include customer support, finance and accounting, and marketing, but the business function at the center is HR (53%) – and the focus is on people.
What if Small Businesses Need Help With AI?
Employers and HR leaders interested in enhancing the efficiency of how their business works and streamlining what their business works on have opportunities to use AI technology to facilitate the outcomes.
Paychex doesn’t just have the technology you need to help you implement AI for your HR needs, but the expert guidance that helps you optimize its benefits. Learn more and enjoy special pricing for ABA members.
Write a letter to the editor, share a story tip or update, or report an error.This content is advertising.
