New research from global employment platform, Employment Hero, has revealed the emergence of an “AI advantage gap” across UK small businesses, with senior leaders far more likely to use and benefit from AI than junior staff.

The report* has uncovered a stark divide in how AI is being adopted at work – with bosses and older millennials seeing the benefits in their day-to-day productivity, while entry-level workers risk being left behind.

While nearly three-quarters (73%) of senior managers use AI monthly, this drops to just 32% for entry-level employees. Despite popular claims that Gen Z are leading the AI charge, it’s millennials who are actually the heaviest users.

This generational and professional divide is creating an uneven playing field, with AI tools largely concentrated at the top. Leaders are setting the pace, but many workers lack guidance, or access to tools relevant to their roles.

As one respondent from the report highlighted: “The installation of AI and making employees aware about how to use it, is the biggest challenge for our business nowadays” Head of People, business size 50-99.

Poor AI rollout linked to productivity loss

While over half of UK business leaders credit AI for improving productivity, the report also finds that poor implementation is harming output. Employees who feel excluded from AI initiatives report a 50% decline in their own productivity. Productivity is also halved if a business has no/low level introduction and adoption of AI.

Small businesses at higher risk

The gap is even more pronounced in smaller firms. The data shows that companies with fewer than 50 employees are half as likely to have implemented AI, despite technology being cited as the number one driver of productivity growth.

Compared to larger firms, SMEs are:

●      28% less likely to invest in technology

●      Nearly half as likely to prioritise technical knowledge in staff

●      More likely to say they are operating in “survival mode”

Without greater support, smaller businesses face falling further behind.

Cutting through the AI myths

The research also helps redefine AI’s impact on workers, confronting the widespread belief that it’s merely a shortcut. According to the report, when employees use AI tools regularly, the impact is overwhelmingly positive – 40% feel less overwhelmed and 38% report better quality output.

These figures suggest that AI isn’t replacing work, but improving it.

Kevin Fitzgerald, UK Managing Director of Employment Hero said: “AI is only delivering productivity gains for some, and that’s a huge problem.”

“For technology to drive meaningful change, it needs to be in the hands of everyone. That means investing not just in access to tools, but in the training, support and confidence people need to actually use them.

“We need a trickle-down , human-centred approach to AI adoption. One that starts with leadership, but quickly and intentionally reaches every corner of the business.

“Closing the AI advantage gap is essential – not just for the success of individual companies, but for improving productivity across the UK economy.”

*Report  Work that Works