Gen Z is bringing its own AI to work. Singapore’s SMEs need rules, not bans

Singapore's young workforce is harnessing artificial intelligence (AI) independently, often on personal devices and without oversight from their employers. A study by Deel found that 49% of Singapore workers aged 18 to 29 believe AI increases their productivity at work, compared to 33% in Australia. This raises the question of who should establish the rules when the youngest employees are the most avid users.

Adoption of AI is outpacing oversight among small and medium-sized enterprises (SMEs) in Singapore. Only 13% of respondents reported that their AI use is monitored, indicating that the majority of AI usage occurs unnoticed by employers. The productivity gains from AI use are evident, but the methods employed by young workers are largely hidden.

Young workers' concerns about over-reliance on AI (29%) are slightly higher than their worries about job security (26%). Karen Ng, Regional Head of Expansion and Market Lead for Singapore, Hong Kong, ASEAN and India at Deel, suggests that employers should provide clear expectations and practical guardrails to support young workers' independence.

Smaller firms are far behind their larger counterparts in AI adoption. Only 23.9% of firms with fewer than 25 employees have started using AI, compared to 76.4% for firms with more than 500 employees. The barriers to adoption differ by size, with smaller firms citing a lack of strategy (32.4%) and low trust in AI (30.8%), while larger firms point to integration complexity (56.1%) and data security (55.4%), and are more likely to have governance frameworks in place (37.5%).

This gap in AI adoption matters, as SMEs are competing for a shrinking pool of young talent. Young workers increasingly view working abroad as a 10-year goal, and 21% of them aim to do so. Small employers also face perception challenges. While 82% of Gen Z workers feel trusted to work without micromanagement, 71% feel pressured to be grateful for having a job, and 47% believe leaders view their generation as entitled and lazy. Treating young employees' AI use as misconduct could reinforce these negative stereotypes.

The instinctive response to hidden AI use is often to ban it. However, Deel's findings suggest that this approach could backfire, as confident AI users are the ones delivering productivity gains. Overly restrictive governance may stifle the very productivity improvements employers seek. Instead, rules that foster AI adoption without stifling innovation are necessary to bridge the gap between young workers' AI use and their employers' oversight.