Small businesses using AI hired faster, Gusto analysis finds

A new analysis of small-business payroll data challenges the idea that artificial intelligence automatically means fewer workers. Businesses that adopted AI had higher headcounts over the following year than comparable firms that knew about AI but had not adopted it, according to an analysis Gusto published September 10.

Gusto found that AI-adopting businesses had about 7% higher headcounts during the four quarters after adoption. The difference grew from about 4.5% early in the period to about 6.8% by the end of the fourth quarter. Among businesses with fewer than 10 employees, teams grew about 10% more than at comparable non-adopters.

The findings show an association, not proof that AI caused the hiring. Businesses chose whether and when to adopt the technology, and the study did not randomly assign AI use.

What Gusto studied

The analysis followed 2,262 Gusto customers with enough payroll history to measure employment changes. Of those businesses, 1,593 reported using generative AI and 669 said they were aware of AI but had not adopted it.

That comparison matters. The non-adopter group was not made up of companies that had never heard of AI. It consisted of businesses that knew about the technology but had chosen not to use it, allowing Gusto to compare adoption decisions among firms with awareness of AI.

Adoption timing came from businesses’ self-reported survey responses. Gusto then used payroll records to measure the number of employees on each company’s payroll in each quarter after adoption.

Hiring was concentrated in hands-on jobs

The new hires were primarily people doing the work businesses sell to customers, rather than workers hired for AI-specific technical roles. Gusto identified hiring among therapists, dental hygienists, teachers, technicians and cooks, along with some front-desk and administrative positions.

The pattern appeared across several types of small businesses, including community services, goods-producing firms and personal services. Small community-services businesses with fewer than 10 employees showed especially strong reported growth, at about 19% relative to comparable firms.

Gusto’s interpretation is that AI may take on routine administrative work such as scheduling, documentation, marketing or research, leaving owners and employees more time to expand customer-facing services. That explanation is plausible, but the payroll analysis cannot establish why any individual business hired or whether AI produced additional capacity.

What the numbers cannot show

The study is based on Gusto customers who responded to a survey, not a random sample of U.S. small businesses. Companies that adopt AI early may differ from other businesses in ways the analysis cannot fully observe, including management practices, growth plans or access to capital.

The findings concern payroll headcount. They do not establish broader changes in productivity, revenue, wages, job quality or long-term employment. Gusto reported that its result remained consistent in a robustness check examining wages, but the analysis was not designed to explain the reasons behind each hiring decision.

National labor-market context

The broader U.S. labor market remained active in the latest federal data. The Bureau of Labor Statistics reported that nonfarm payroll employment rose by 162,000 in August, while the unemployment rate held at 4.1%. Food services and drinking places and local government education added jobs, while the information industry lost jobs.

Separate BLS data showed 7.3 million job openings in July, with 5.1 million hires and 1.7 million layoffs and discharges. Those figures provide context but do not show that AI caused hiring nationally.

A 2026 Federal Reserve Banks survey provides a broader snapshot of AI use among employer firms: 46% said their business or employees were using AI when surveyed, and 71% of AI-using firms reported increased productivity. The survey measured businesses’ reports about AI, not payroll outcomes, so it does not independently confirm Gusto’s headcount estimate.

What to watch next

For very small businesses, the results suggest that early AI adoption may coincide with expanding headcounts rather than immediate staff cuts. The clearest reported gains were in customer-facing and hands-on work, not necessarily in AI engineering.

Owners should treat the findings as suggestive evidence, not a guaranteed return-on-investment forecast. Workers should watch whether employers use AI to reassign routine administrative tasks and whether new service-oriented roles require different training.

The next important test will come from broader independent data tracking AI adoption alongside hiring, layoffs, wages, productivity and job quality across businesses beyond Gusto’s customer base.

Sources

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