By Sid Orlando for Mercury
- 79% of companies with significant AI adoption said they’re hiring more because of it
- AI adoption in some industries has led to downsizing of teams and loss of jobs
Despite fears that artificial intelligence will replace workers, some businesses using the technology are doing the opposite. A recent Mercury survey of 1,500 early-stage entrepreneurs found that 68% of AI adopters are expanding their teams, even as two-thirds of startups report higher-than-expected costs in operations, sales and marketing. Overall, 79% of founders said they plan to increase spending in the year ahead — underscoring resilience and a shift in how AI is shaping growth, Mercury reports.
Hiring acceleration, not replacement for startups that adopt AI
AI adoption or not, 65% of respondents said talent acquisition costs rose in the last year yet it didn’t appear to do much to slow down their hiring. In fact, when asked about the impact of market conditions on various areas of the business, hiring was the one most often left unchanged or only lightly adjusted.
Most surveyed companies were at least doing some hiring: 68% of companies using AI are actively scaling team size, which stands in pretty sharp contrast to the 13% of non-AI adopters actively scaling their teams. Moreover, 79% of companies with significant AI adoption said they’re hiring more because of it, and 61% of those who’ve had at least some AI adoption said the same. Moreover, only 3-4% of those AI users said they’re hiring some version of less.
Notably, AI-adopting companies reported increased hiring across growth-oriented roles:
- 44% business development
- 43% sales
- 42% marketing
- 42% customer service
Contractor-enabled scale power agile teams
While many of these early-stage companies are prioritizing full-time hires, a majority are also turning to freelancers and consultants to fill gaps and stay nimble. 61% of those surveyed said their company is “very reliant” or “reliant” on contract talent, a model that seems to increasingly be a defining feature of modern startup operations.
The data also showed some splits when looking at contractor usage in relation to AI adoption:
- AI-adopting companies showed significantly higher contractor usage across most business functions particularly in growth-driving areas like sales and marketing. Non-AI adopters, however, leaned more on contractors for operations.
- 38% of entrepreneurs who said their company’s AI adoption was significant said they use contractors to access global talent, more than 2x the rate of non-AI adopters (15%).
- On the flip side, non-AI adopters were more likely to use contractors for temporary work needs (38% vs. 27% for AI adopters), suggesting some differing strategic approaches to workforce flexibility.
Workers may gain from AI, not lose out
Rather than replacing workers, this report suggests that AI is reshaping how startups build teams. Founders adopting the technology are more likely to hire full-time staff, rely on contractors for growth-oriented work, and expand overall spending even as costs climb. Taken together, the findings point to a workforce strategy that blends optimism, technology, and flexibility as startups navigate uncertain economic conditions.
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