Autumn Budget: Using Automation & AI To Do More With Less

The UK Budget has raised the National Minimum Wage again. This helps workers, but it increases costs for SMEs. If you run a business with tight margins, rising expectations, and have trouble hiring or retaining staff, you already know this. Higher wages do not have to mean you stop growing, but you cannot ignore the impact.

Increasingly, SMEs are finding new ways to strengthen productivity, improve service levels and control costs; not by expanding teams, but by embracing automation and AI. Below, we break down what these changes mean for SMEs, and how technology can help businesses stay resilient and competitive.

What the wage rise means for SMEs

From April, payroll costs will go up for many businesses, especially those with customer-facing or admin teams. This usually leads to:

Less hiring

Tighter margins

Pressure to do more with the same resources

The question many SME leaders are now asking is: “How do we keep moving forward without simply adding more people?” This is where automation and AI have become critical enablers.

“Rising operational costs continue to be a challenge for SMEs, but automation and AI are helping to close the gap. By removing repetitive work and boosting everyday productivity, organisations can continue to grow sustainably, even without expanding their teams. As SMEs face wage increases and wider economic pressures, investing in smarter ways of working becomes essential. The right technology doesn’t just reduce costs; it empowers teams to focus on the work that truly adds value and drives long-term success.”

James Healey, Chief Commercial Officer, Air IT Group

Automation: Increase capacity without increasing headcount

Automation is no longer a future aspiration, it’s something SMEs are already using to streamline daily operations. At Air IT Group, we see the impact this makes first-hand. Through platforms like Air 360, automation handles huge volumes of routine activity quietly in the background, freeing teams to focus on meaningful, high-value work. Tasks that once required manual effort can now be completed instantly, consistently and with no interruption to staff.

Everyday processes simplified through automation:

Password resets

Mailbox access

Group changes

Onboarding and offboarding

Monitoring and alerts

Device health checks

Security and compliance enforcement

These aren’t “nice-to-haves”, they remove genuine bottlenecks that slow SMEs down. Automation consistently proves to be the quiet hero in day-to-day operations: increasing capacity, reducing workload, and giving SMEs the ability to grow sustainably without increasing payroll.

AI: turning everyday tools into productivity multipliers

Alongside automation, AI tools like Microsoft Copilot give SMEs a powerful opportunity to increase productivity without expanding headcount. And this shift is already well underway across the UK. According to the British Chambers of Commerce, 35% of UK SMEs now report actively using AI – a sharp rise from the previous year. This tells us two important things:

1. Ensure your business is ready, and use AI safely

As more SMEs adopt AI, it’s essential they do so securely and responsibly. Not all AI tools offer the same protection, and without clear governance, there’s a risk of exposing sensitive business data or creating compliance gaps.

This is why many organisations choose Microsoft Copilot. It operates entirely within the trusted Microsoft 365 environment, respecting existing permissions, maintaining clear audit trails, and ensuring business data remains protected by Microsoft’s privacy and security standards.

Before rolling out AI across your business:

Audit where business data is stored

Review access levels and permissions

Set clear staff usage policies

Choose tools with strong compliance features

AI can be transformative, but if you skip these steps, you invite risk.

2. Don’t fall behind competitors as AI adoption is accelerating

With more than a third of SMEs already using AI, those that ignore it risk losing ground to competitors who are moving faster and operating more efficiently.

Businesses adopting AI report improvements in:

Decision-making speed

Administrative efficiency

Customer responsiveness

Document creation and reporting

Team collaboration

AI doesn’t replace people, it amplifies their capacity. Combined with strong automation foundations, AI allows SMEs to achieve more, respond faster and build resilience in a high-cost environment.

“Automation has become one of the most effective ways for SMEs to increase capacity without increasing costs. At Air, our automation platform now performs more than 60 actions every second, resolving routine tasks instantly, strengthening security and eliminating bottlenecks that traditionally slow businesses down. And we’re seeing this shift across the wider business community too – with 35% of UK SMEs already using AI in some form. The opportunity now is to ensure these tools are used safely and effectively, with the right data foundations and governance in place, so businesses can unlock their full potential without introducing unnecessary risk.”

Peter Pendlebury, Chief Automation & AI Officer, Air IT Group

Where SMEs can start with their business operations, without major investment

You don’t need a full digital transformation programme to begin seeing benefits. Most SMEs start small, focusing on areas that deliver immediate value:

Identify everyday admin tasks – things like invoice processing, expense approvals, and scheduling can often be automated or simplified with tools you already have.

Improve document and data management – set up shared drives, version control, and simple workflows to reduce duplication and make information easier to find.

Activate Microsoft Copilot in your Microsoft 365 environment – many SMEs already own the licence, they just aren’t making full use of it.

Review legacy systems – older tools often limit your ability to automate and increase manual workload.

Work with an MSP that prioritises automation and AI – this ensures access to proven workflows, continuous optimisation and secure, compliant adoption of new tools.

Budget Addendum: What else SMEs should know

Permanent 40% first-year allowance on qualifying capital expenditure: The Budget introduced a new tax relief allowing businesses to deduct 40% of the cost of certain capital investments such as servers, networking equipment, security hardware or modern workplace infrastructure, in the first year. For SMEs, this means it’s now more tax-efficient to invest in IT upgrades that support automation, cybersecurity and cloud adoption. The government is effectively giving businesses a discount on modernising their tech stack.

Business-rates relief for many retail and hospitality SMEs: Some sectors, particularly retail, hospitality and leisure, will benefit from business-rates reductions. For businesses outside these sectors, costs may continue to rise. This mixed landscape means all SMEs should plan carefully for their overall cost base and look for efficiencies in areas they can control, like IT, automation and operational processes.

Broader financial pressures remain: Income tax and National Insurance thresholds remain frozen, and changes to pension salary-sacrifice are on the horizon. For business owners, this may affect take-home pay, benefits, or the cost of supporting staff. Combined with rising wages, it reinforces the importance of predictable IT spending, automation-driven productivity, and tools that help teams do more without increasing headcount.

Growth doesn’t have to mean headcount

Payroll costs may be rising, but that doesn’t mean SMEs must reduce ambition. Automation and AI give businesses the flexibility to operate more efficiently, deliver better service and scale at a sustainable pace – even when budgets are tight.

If you’d like support identifying where automation or AI could make the biggest impact in your business, we’re here to help.

Get a free consultation