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Small firms that adopted AI hired faster: payroll records from Gusto

Four quarters after owners said they adopted AI, their firms' headcount was 6.8% higher than at comparable firms that had not adopted it. Firms with fewer than 10 employees grew about 10% more. Firms with 10–24 employees showed no measurable change.

By
Last reviewed
Type of study
Data analysis
Published
2026
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At a glance

Source
Tremper and Bowen (Gusto) (2026). Small Businesses that Adopted AI Are Hiring Faster. Gusto Insights, September 2026. gusto.com · Not peer-reviewed: other researchers have not yet checked it for a journal.
How it was done
Owners said in an April 2025 survey whether and when they had started using AI. The authors then tracked each firm's headcount in its payroll records and compared adopters with firms that knew about AI but had not adopted it. Data analysis. It builds a measure from existing data, such as job and task records.
Who took part
2,262 US small businesses that use Gusto payroll and answered its survey: 1,593 that used generative AI and 669 that knew about AI but had not adopted it.
Where
United States; small employers in many sectors, with separate results for firms with fewer than 10 employees and with 10–24.

“The findings are associational: they describe a consistent pattern, not proof that AI caused the hiring.”

Gusto sells payroll and benefits services to small businesses. The authors are its own economists.

What it found

  • All adopters. Headcount at adopting firms rose gradually, from about 4.5% to 6.8% above the comparison firms by the fourth quarter.
  • Firms with fewer than 10 employees. Their headcount grew about 10% more than at comparable firms. For a nine-person firm, that is about one extra person within a year.
  • Firms with 10–24 employees. The authors measured no change in headcount.
  • Health and care. Small community-services firms, mainly health care and social assistance, with fewer than 10 employees grew 19% more. They hired staff such as dental hygienists and therapists.
  • Who was hired. New hires were mostly hands-on and customer-facing: care staff, teachers, technicians, cooks and some front-desk staff.
  • Light or deep use. Firms that used AI for everyday tasks showed the same hiring gain as firms that had built it deep into their operations.
  • Pay. Wages did not change.

When the result holds

The firms sell hands-on services in many sectors. A study of US venture-backed startups found the opposite: those whose work was most exposed to AI cut staff by 8%, mostly juniors (Gupta, Qian, Simintzi and Sun, 2026). The two sets of firms differ in what they sell, and the two studies measure AI differently.

Limits

  • The authors say plainly that the result shows association, not cause. Firms choose whether and when to adopt AI.
  • The hiring gain was the same for light and deep use. If AI caused the hiring, more use would be expected to bring more. Firms that were already growing may be the ones that adopt.
  • Adoption and its timing are what owners reported. Only headcount comes from records.
  • The firms are Gusto customers who answered a survey, not a random sample of US small businesses.
  • It covers one year after adoption.

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