The loudest AI-and-jobs stories tend to come from corporate America: the tech giants attributing layoffs to AI, the consultancies restructuring around it. The quiet counter-story is happening on Main Street. Payroll provider Gusto has published one of the first real-world, payroll-based studies of what AI adoption does to hiring at small businesses, and its finding runs against the dominant narrative: businesses that adopted AI hired more, not less.
🔍 THE BOTTOM LINE
Gusto tracked 1,593 small businesses that had adopted AI against 669 that knew about AI but had not adopted it, using real payroll data rather than surveys. In the year after adoption, the AI adopters grew headcount about 7 percent more than comparable non-adopters, with the gap climbing steadily from about 4.5 percent to 6.8 percent by the end of the fourth quarter. The smallest businesses — under 10 employees — gained the most, growing about 10 percent more than non-adopters. The new hires were overwhelmingly hands-on, customer-facing roles: care providers, cooks, technicians, front-desk staff. Not technologists.
What the Data Actually Shows
The report, published on 10 September 2026, followed respondents to Gusto’s 2025 Main Street Meets Machine Learning survey and tracked how their workforces changed over the following year. Because Gusto runs payroll for more than 500,000 small US businesses, the researchers could measure actual headcount changes rather than asking owners what they intended.
The headline numbers:
- AI adopters grew headcount about 7 percent more than comparable non-adopters in the year after adoption, rising steadily from 4.5 percent to 6.8 percent across four quarters — a sustained trend, not a one-time hiring bump.
- The smallest firms gained the most. Companies with fewer than 10 employees grew about 10 percent more than comparable non-adopters. For a typical nine-person business, that is roughly one extra hire within a year.
- It is not a tech story. Hiring gains showed up across restaurants, manufacturers and accounting firms, not just software companies.
- Health care saw the strongest effect. Practices with fewer than 10 employees — dental offices, mental health clinics — grew headcount nearly 20 percent more than comparable non-adopters, largely by hiring more care providers such as dental hygienists and therapists.
- New hires were mostly hands-on roles. Across adopters, businesses added teachers, technicians, cooks and front-desk and admin support.
“This data pushes back on the idea that AI is coming for jobs on Main Street,” said Nich Tremper, senior economist and head of Gusto’s Insights Group. His interpretation: smaller teams are used to people doing tasks well outside their job descriptions, and AI may be shifting that work back to people’s actual expertise — which owners then reinvest into hiring to serve more customers.
Why This Cuts Against the Corporate Story
The contrast with large-corporate messaging is striking. Challenger, Gray & Christmas — the outplacement firm whose monthly job-cut report we have tracked all year — has had AI as a leading cited reason for US layoffs for much of 2026, even as total layoff announcements fell to two-year lows and hiring plans rose. Gusto’s data suggests those two realities can coexist: large firms citing AI as they restructure, small firms using AI to grow payrolls.
As we reported in our coverage of Challenger’s August data, AI slipped to fourth place as a cited layoff reason in August while hiring plans jumped 37 percent on last year. The Gusto study adds a different layer: it is not just that AI-attributed layoffs are falling — the businesses actually adopting AI are expanding their payrolls relative to peers. Revelio Labs’ recent labour market readout found the same firm-level pattern at scale: the most AI-exposed firms recorded fewer layoffs than the least-exposed, while AI-adopting firms grew employment relative to non-adopters.
The Guardian reached a similar conclusion from reporting rather than payroll data in July, arguing that reports of wide-scale AI replacement of workers are overblown at the small-business level, where owners use AI to help existing staff rather than replace them.
The Caveats
Several limits deserve weight before treating this as settled.
It is a survey follow-up, not a randomised trial. Businesses that chose to adopt AI may differ systematically from those that did not — perhaps they were better run, or growing faster for reasons unrelated to AI. Gusto compared adopters against “similar” non-adopters, but self-selection is hard to fully remove.
It is US data. Small businesses account for roughly half of US private-sector employment, which gives the finding weight — but New Zealand’s small-business economy, with different wage settings, a different health system and a much smaller domestic market, will not map one-to-one. The closest NZ evidence is indirect: Employment Hero’s survey of 820 NZ workers this month found the most relaxed AI attitudes of any market studied, with 57 percent saying AI is building their skills — a temperament that fits the Gusto pattern of AI as an amplifier rather than a replacement.
“More hiring than non-adopters” is not “more hiring than before.” The study measures adopters against non-adopters, not against their own past. In a soft labour market, both groups may be growing slowly; adopters are simply growing faster.
The mechanism matters more than the number. If the finding survives scrutiny, the interesting part is Tremper’s interpretation — that AI returns time to stretched small teams, who convert it into service capacity and then into hires for care, food and customer-facing work. That is a different story from “AI creates tech jobs,” and a different one from “AI deletes jobs.”
What It Means for Jobseekers
For anyone planning a career around this data, the practical signal is in where the hires landed. The AI-adopting small businesses did not mostly hire prompt engineers. They hired dental hygienists, therapists, cooks and technicians — the people who deliver the service once AI has freed up the owner’s time. Mark Cuban’s widely-shared advice that AI-literate young people should sell AI help to small businesses remains one bet; Gusto’s data suggests an adjacent one: as small firms absorb AI, the bottleneck roles they hire for are human-facing ones.
There is also a lesson in the framing. Nearly every alarming AI-jobs datapoint this year has come from announcements — layoff attributions, survey intentions, executive predictions. Gusto’s contribution is a payroll ledger: what actually happened to headcount in the year after adoption. As we have noted in earlier coverage of the jobs-hype-versus-reality debate, the difference between what companies say about AI and what their payrolls do is where the honest picture lives.
NZ Implications
New Zealand’s economy is, proportionally, a small-business economy to a degree that even the US is not — and it is one where the largest employer sectors are exactly the ones Gusto found hiring most: health care and social assistance, hospitality, and trades-adjacent services. The Ministry of Social Development and MBIE have both projected care-sector demand growth for years, driven by demographics rather than technology. If AI adoption among NZ’s smallest firms follows the US pattern — time returned to owners, reinvested in service capacity — the effect would land in the sectors already doing the country’s heaviest hiring.
The caution travels too. NZ’s small firms have had less exposure to affordable AI tooling than their US counterparts, and the country’s AI skills demand is already outpacing Australia’s in job ads. If Gusto’s mechanism is real, the NZ firms with the most to gain are the nine-person ones — and the jobs created will look more like hygienists and cooks than machine-learning engineers.
❓ FAQ
Did the Gusto study find AI creates jobs? Not exactly — it found AI-adopting small businesses hired more than comparable non-adopters over the following year, using payroll data. Whether AI caused the gap or faster-growing firms simply adopt AI earlier is the key open question.
How many businesses were in the Gusto study? 2,262 in total: 1,593 AI adopters and 669 non-adopters that were aware of AI but had not adopted it, tracked via real payroll data for a year after adoption.
Which businesses benefited most? Firms with fewer than 10 employees grew headcount about 10 percent more than comparable non-adopters. Tiny health-care practices — dental offices, mental health clinics — grew nearly 20 percent more, mostly by hiring more care providers.
Does this contradict the AI layoff headlines? It complicates them. The layoff headlines mostly describe large firms announcing cuts; Gusto’s data describes what happens to headcount at small firms after they adopt AI. Both can be true at once — and Challenger’s own August 2026 data showed AI slipping as a cited layoff reason while hiring plans rose.
Sources
- Gusto — Small Businesses that Adopted AI Are Hiring Faster (PR Newswire, 10 September 2026)
- Inc. — AI Is Blamed for Cutting Jobs. A New Report of 2,000 Small Businesses Found the Opposite
- The Guardian — Corporate America may be using AI to cut jobs, but small businesses are using it to keep them
- Miami Herald — Businesses using AI are hiring, not firing, new report finds
— CJ Murden, editor of Singularity.Kiwi. Former digital technologies teacher, author of AI-focused books. Writing with a New Zealand focus.
