A new government report from Singapore's Ministry of Trade and Industry (MTI) shows that companies using artificial intelligence for the first time saw a four percent increase in total employment in their first year of adoption, with that figure rising to eight percent one year later. The findings offer human resource professionals a data-driven counterpoint to widespread employee fears about AI-driven job losses.
The study, published on Tuesday, measured the firm-level effects of AI use on employment and performance in Singaporean companies. It found that revenue also increased by seven percent in the first year of AI adoption, jumping to 16 percent one year post-adoption.
"Deeper analysis on the employment effects show that they differ across worker types. Initial gains are found to be concentrated among local higher-earners and mid-career workers, as well as skilled foreign professionals," the report said. "However, as firms deepen their AI capabilities, the local employment gains broaden across wage and age groups."
No significant productivity gains yet
While revenue rose, the report found no "statistically significant increase" in productivity or profit in the four years following initial AI adoption. The authors suggested this may be because measured gains only emerge after firms complete complementary investments and process adjustments.
"There is no evidence of statistically significant gains in profit and VAPW (value-added per worker) at the firm-level over the immediate four-year post-adoption period," the report said.
The findings offer some reassurance for HR leaders managing a workforce wary of automation. A recent Robert Walters survey showed that 48 percent of employees in Singapore are concerned that AI adoption includes the risk of job displacement. The MTI report suggests layoffs that occur during AI adoption are generally outweighed by new hiring.
"It may also be the case that AI tends to automate specific tasks rather than entire jobs, thus allowing workers to focus on the remaining and/or new complementary tasks," the report said.
Policy lessons for HR leaders
The report noted its data only runs through 2024, reflecting the early stages of AI diffusion and not capturing newer advances like agentic AI. Still, the authors outlined three policy lessons directly relevant to human resources teams:
- The importance of strengthening foundational digital capabilities, which can aid AI adoption
- Support for AI use should be differentiated by sector and firm size
- Workforce policy should focus on job transformation and worker retraining to help staff move toward AI-complementary tasks
These findings align with current thinking among HR professionals exploring structured training in this area. An AI Learning Path for CHROs from Complete AI Training, for example, addresses the workforce transition challenges highlighted by the MTI report.
Why this matters for HR professionals
For HR teams, the Singapore data suggests that an intelligent workforce strategy should involve identifying which tasks in each role are likely to be automated and designing retraining programs for the remaining complementary tasks. The report also reinforces that initial productivity returns may lag behind hiring gains, meaning HR leaders may need to manage leadership expectations about the timeline for seeing measurable efficiency improvements from AI adoption.
Your membership also unlocks:
