Small Businesses Bounce Back: Optimism, AI, and Plans for Hiring

In a new report, Justworks shares exclusive new data on small business sentiment. In a survey of a sample of our customer base of over 14,000 small businesses across the country, we reveal key indicators of small businesses optimism and future trends of AI adoption.

Key Survey Insights

In today's uncertain economy, small businesses on Justworks are cautiously optimistic about their success. Though only 16% of our customers rated the US economy as at least "good,"on the other hand, they continue to have more confidence in their own businesses: 50% reported their own business' financial health as "good" or "excellent." Our latest Customer Panel survey of small business leaders shows two other key storylines emerging: hiring plans are rebounding after a dip, and AI adoption is accelerating at a pace that's reshaping operations.

1. Small Business Hiring: A Rebound in Confidence: Six in ten (60%) leaders say they plan to add headcount in the next 12 months - a meaningful jump from 48% last quarter and a return to late-2024 levels.

2. AI Moves From Experimentation to Everyday: Nearly six in ten (59%) report paying for AI tools - up from 50% in May - and another 16% are experimenting with free new platforms or trials.

3. Workforce Augmentation, Not Reduction: Just 14% see AI as a way to reduce headcount, while nearly half (48%) see AI as a tool for scaling with the same workforce.

4. AI Training Gap:Of those who are using AI (either purchased tooling, experimenting with free tools/trials, or both), 2 in 5 (39%) are not providing any type of training to their employees around AI.

Small Business Hiring: A Rebound in Confidence

After a sharp decline in May, small business hiring intentions are back on the rise. Six in ten (60%) leaders at Justworks customers say they plan to add headcount in the next 12 months - a meaningful jump from 48% last quarter and a return to late-2024 levels.

What makes this recovery noteworthy is its contrast with broader economic sentiment. While only 16% of these small business leaders currently describe the U.S. economy as at least "good," nearly half (49%) report their own business's financial health as good or excellent. This resilience suggests that even amid uncertainty, many of these small businesses feel confident in their ability to invest in people.

AI Moves From Experimentation to Everyday

The most striking shift this quarter is the speed at which these small businesses are embracing AI. Nearly six in ten (59%) report paying for AI tools - up from half in May - and another 16% are experimenting with free AI tools or trials. Only 4% of respondents say they aren't exploring AI at all.

Where is AI taking hold? Operations (49%), marketing (47%), and product development (46%) top the list of current applications. Looking forward, small businesses expect AI to play the largest role in content creation (72%), data analysis (58%), and scheduling/workflow automation (50%).

Interestingly, those not investing in AI are most likely to turn to the media for information about AI (71%), while those investing are most likely to turn to their peers (68%).

Workforce Augmentation, Not Reduction

Importantly, small businesses on Justworks don't see AI primarily as a way to cut jobs: just 14% see AI as a way to reduce headcount, while nearly half (48%) see AI as a tool for scaling with the same workforce. 17% indicated that any workforce reduction would come in the form of contractors or third-party hires.

This is good news to American workers who fear their jobs will be replaced by widespread AI implementation.

Noticeably, small businesses on Justworks have a different mindset compared to bigger businesses; the 2025 World Economic Forum Future of Jobs Report found that 40% of large companies surveyed anticipated reducing their workforce where AI can automate tasks.

Training Gap: Tools Without Skills

Despite the surge in adoption, the way small these businesses are preparing their teams for AI remains uneven. Of those who are using AI, 2 in 5 (39%) are not providing any type of training to their employees around AI. Among those that do, most describe their approach as informal, often giving employees access to tools without structured learning programs.

This highlights a growing gap: while enthusiasm for AI is high, the infrastructure to support effective use is still developing. Companies that can pair adoption with training are likely to see greater returns - and avoid risks related to misuse or inefficiency.

Looking Ahead: Growth Powered by People and Technology

Together, these findings paint a picture of small businesses cautiously optimistic about the future. Hiring plans are back on the agenda, not as a gamble but as a strategic move grounded in continuing confidence about their own financial footing. At the same time, AI is no longer a side experiment - it's becoming a core part of operations, with the potential to enhance efficiency and unlock new growth.

For small business leaders, the message is clear: building resilient teams and integrating smart technology are not competing priorities. Done together, they may be the foundation of sustainable growth in the year ahead.

Research Method

The FY26-Q1 Customer Panel survey was conducted online between August 20 and September 2, 2025, among 353 small business customers selected from a representative panel of Justworks PEO customers. Respondents represent a broad cross-section of industries and geographies across the U.S., and results are statistically significant with a margin of error of approximately ±5.14% at a 95% confidence level.