Israeli Firms Save Four Work Hours Weekly Per Employee Using AI but Face Cost and Skill Challenges
A recent survey conducted by KPMG and Microsoft Israel in June among 42 leading Israeli organizations across sectors such as technology, high-tech, startups, and the public sector reveals that while company leadership widely recognizes the importance of artificial intelligence (AI), the main challenge now lies with employee adoption. The survey, marking its second consecutive year, examined AI adoption rates, its impact on work, expenses, and business outcomes.
The primary barrier today is a lack of employee knowledge and skills, cited by 40% of respondents, a shift from last year when leadership readiness was the main obstacle. Additionally, 36% expressed concerns about data security, privacy, and regulation, while 19% noted difficulties integrating AI with existing systems. The focus has moved toward systematic, safe, and measurable AI implementation within organizations.
Financial impacts remain mixed: 48% reported cost savings due to AI, but 31% experienced increased expenses mainly from licensing, training, and implementation, and 21% saw no change. Operationally, AI has already delivered significant time savings, with 74% of organizations reporting that an average employee saves at least three hours weekly, averaging 4.1 hours saved per week. Over half of employees in computer-based roles use AI tools at least weekly in 57% of organizations.
The survey highlights that AI’s return on investment depends on integrating tools into core business processes rather than isolated use. Organizations investing in employee training, AI governance, integration, and usage measurement are better positioned to realize economic benefits. Currently, 36% of organizations provide dedicated AI training and tools, 24% offer incentives for AI use, but only 12% have a clear strategy with active management involvement.
AI’s greatest value is seen in automating and streamlining workflows (40%) and technological development including coding and product creation (38%). This marks a shift from previous emphasis on data analysis and software development. AI also significantly influences decision-making (67%), productivity (55%), and work quality (52%), though its impact on revenue and profitability is more moderate (38%).
Experts emphasize that successful AI adoption requires active leadership engagement to set goals, incentivize use, and manage implementation. As AI becomes integral to daily work, organizations must enhance data, automation, security, and organizational capabilities to fully harness AI’s strategic potential. Microsoft Israel’s VP Adi Crystal noted that the competitive edge will come from developing new skills, empowering employees, and embedding AI broadly across organizations.
