AI is projected to generate $93 billion in annual economic benefits for Australia, per the Tech Council of Australia.
The Accelerating AI Impact for Small and Medium Enterprises report, prepared by Delwood Advisory with support from Employment Hero, Google, and Deputy, uses data from Deputy, Xero, and LinkedIn to assess AI adoption among Australian SMEs.
An average SME could gain $136,000 annually in productivity through AI adoption. Among SMEs using AI, 94% reported productivity gains, and 54% of employees using AI reported increased job satisfaction.
AI adoption varies across industries and regions. Regional businesses risk falling behind metropolitan ones, with construction, hospitality, and retail showing significant gaps between SMEs and larger enterprises.
Barriers to adoption include limited AI knowledge, workforce skills, uncertainty about returns on investment, and concerns about security and reliability.
Tech Council of Australia CEO Kate Cornick noted that small businesses employ nearly two-thirds of Australia’s private-sector workforce.
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“Improving their productivity matters to the whole economy, and this research shows just how substantial the opportunity from AI could be,” she said.
AI can reduce the time SMEs spend on administrative tasks, especially amid rising costs and staff shortages. Applications include payroll and rostering in hospitality and recruitment in retail. However, businesses need guidance on selecting and integrating AI tools.
Employment Hero co-founder and CEO Ben Thompson highlighted that payroll, superannuation, employment awards, and compliance consume much of small business owners’ time.
At Employment Hero, AI has accelerated product development, supported marketing campaigns and web page testing, and enabled AI agents to handle 95% of routine HR support queries.
The report recommends expanding AI training, advisory services, and industry-specific guidance for SMEs lagging in adoption.
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