Small Business Using AI are Hiring Faster

A report from Gusto by Nich Tremper and Tom Bowen found that small businesses increasingly use AI to build and grow their companies. Almost two-thirds of startups used AI to make their launch easier.

Small businesses are using AI to increase productivity and grow revenue. And companies that embraced the technology were quicker to hire in the 12 months following startup.

The findings build on Gusto’s 2025 Main Street Meets Machine Learning survey, which found that small businesses adopting AI were more likely to grow their teams in the year after adoption.

In the first year after adopting the technology, their headcounts grew about 5% more than those of similar businesses that were aware of AI but hadn’t adopted it.

The difference built gradually, rising from about 4.5% to 6.8% by the end of the first year.

That suggests AI adoption wasn’t tied to a one-time hiring bump, but to continued workforce growth. Gusto says the finding is consistent with AI increasing productivity and business output, creating more opportunities for small businesses to expand their teams.

The Smallest Businesses Saw the Biggest Gains

The smaller the businesses, the faster they grew their workforces. Businesses with fewer than 10 employees grew their teams about 10% more than comparable businesses that didn’t use AI.

Why might the smallest companies benefit most? In tiny businesses, the owner’s time and attention are among the company’s scarcest resources, and much of that time can be consumed by administrative work, scheduling, marketing, research, and other overhead tasks.

AI can take on some of that work, freeing owners to focus on the core business — and hire more people to do it.

In fact, a year after adopting AI, the average business in Gusto’s research that started with nine employees had added one more worker.

Businesses with 10 to 24 employees did not experience the same headcount growth. Gusto suggests that’s because many of those companies already have processes and resources in place to handle administrative work. AI-generated productivity gains may instead allow existing employees to spend more time on their core jobs.

The hiring gains weren’t limited to technology or professional services companies. Gusto found growth among Main Street businesses in industries including community services, goods-producing businesses, and personal services.

And the businesses weren’t primarily hiring people for AI or technology jobs.

The added jobs were largely hands-on and customer-facing. Health care and social assistance businesses hired therapists and other care providers, while other companies added teachers, technicians, cooks, and some front-desk and administrative employees.

As Gusto puts it, the pattern suggests that “AI absorbs routine work, freeing owners to put more people on the work that serves customers.”

In Gusto’s 2025 survey, nearly two-thirds of small businesses using AI said they believed the technology would help them compete with larger companies. The latest findings offer some evidence that may be happening.

The benefits aren’t reserved for technology companies or businesses with large tech budgets. A solopreneur using AI to draft proposals and a dental office using it to speed up paperwork are accomplishing essentially the same thing: winning back time that can be spent doing the work customers actually value — and, in some cases, hiring another person to help do it.

Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.

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