AI creates new jobs as UK businesses reshape hiring around technology

The rapid integration of artificial intelligence (AI) into British businesses is reshaping hiring practices and job creation across the country. According to the Lloyds Business Barometer, over half of the surveyed companies report that AI has contributed to job creation, while a quarter are increasingly hiring candidates with AI skills.

This shift is evident as one in five businesses has established new roles focused specifically on AI, signaling a departure from experimental phases and a focus on integrating the technology into their operations.

Amanda Murphy, CEO of Lloyds Business, emphasized the need for companies to move beyond merely accessing AI solutions and focus on building the necessary skills, culture, and confidence to utilize the technology effectively. The survey of 1,200 companies in July highlights the uneven impact of AI on the labor market, with firms creating opportunities for skilled workers while reducing hiring in other areas.

This trend reflects an emerging two-speed economy, with companies recruiting more senior workers equipped with AI expertise while cutting back on hiring in other sectors.

The cost of high employment continues to weigh on businesses, leading to a sharp decline in hiring for AI-exposed positions such as software developers and consultants since 2022. However, there is growing concern among corporate leaders about the potential for AI to reduce employment. Analysis by Bank of England staff suggests that while businesses using AI have become more productive, some of these gains have come at the expense of jobs.

Despite these challenges, AI is increasingly viewed as a driver of productivity, with the Bank of England Governor Andrew Bailey highlighting the importance of moving beyond simply adopting AI to using it effectively. The technology is also a growing focus for Bank of England officials, as they work to help businesses integrate AI into their operations.

In response to these changes, businesses are also introducing or expanding training programs for existing employees. Two-thirds of businesses with annual turnover above £10 million reported that their current workforce possesses the AI skills needed to meet business needs, compared to just over half of all businesses. Additionally, more than 70% of large businesses plan to increase investment in AI to improve productivity, reflecting the growing recognition of AI's potential to transform the British economy.