Small businesses that adopted Artificial Intelligence grew their headcounts faster over the following year than similar businesses that hadn’t, according to new research published by Gusto, a leading partner for small businesses. The findings run counter to a dominant narrative that AI adoption shrinks payrolls.
The report, Small Businesses that Adopted AI Are Hiring Faster, follows respondents to Gusto’s 2025 Main Street Meets Machine Learning survey to track how their workforces changed in the year after they began using AI. Using real payroll data, Gusto compared 1,593 small businesses that had adopted AI against 669 businesses that were aware of AI but hadn’t adopted it.
“This data pushes back on the idea that AI is coming for jobs on Main Street,” said Nich Tremper, Sr. Economist and Head of Gusto’s Insights Group. “The smallest businesses are the ones who are most used to doing more with fewer resources. Smaller teams have historically meant that people are doing tasks that stretch outside of what they’re hired to do. AI may be shifting their work back to their expertise and supporting a business’s productivity. Small business owners seem to be investing that back into their businesses through increased hiring.”
Zoomed out, the findings suggest AI adoption may be reinforcing small businesses’ longstanding role as one of the US economy’s most reliable engines of job creation.
