How AI Adoption Is Helping Small Businesses Hire More Workers

Artificial intelligence has sparked plenty of concern about job losses, but new research from Gusto suggests a more encouraging possibility for small business owners: Businesses that adopt AI may actually be better positioned to grow their teams.

Gusto’s latest analysis examines what happened to small businesses after they began using AI. The findings offer a different perspective on the technology debate—and a reason for entrepreneurs to consider how AI could support growth, rather than simply reduce expenses. 

AI-Adopting Businesses Grew Their Teams Faster

According to Gusto’s research, small businesses that adopted AI saw their headcount grow approximately 7 percent more than comparable businesses that knew about AI but had not implemented it during the first year.

The effect was even stronger among the smallest companies. Businesses with fewer than 10 employees grew their teams by approximately 10 percent more than similar non-adopting businesses.

That matters because small companies often operate with limited staff and tight budgets. An owner may spend hours handling administrative work, responding to emails, creating marketing materials or managing schedules. AI can help reduce some of that workload, potentially giving the business more capacity to serve customers and pursue new opportunities.

Gusto’s findings suggest that, for some businesses, those productivity gains may translate into hiring more people—not fewer.

The New Hires Were Mostly Customer-Facing Employees

One of the most interesting findings is who these businesses hired. Gusto reports that new hires at AI-adopting businesses were primarily hands-on workers who deliver the products or services customers pay for. Examples included care providers, teachers, technicians and cooks.

This is an important distinction. The research doesn’t show that small businesses are primarily hiring AI engineers or building large technology departments. Instead, it suggests that some owners may be using AI to handle routine work while investing their time and resources into expanding the core business.

For a restaurant, that could mean using AI to streamline scheduling or marketing while hiring additional kitchen staff. For a healthcare practice, it might mean reducing administrative burdens and bringing on more people to serve patients. The opportunity is not necessarily to replace employees with technology. It may be to use technology to make room for more employees.

Why This Matters for Small Business Owners

The findings line up with broader research suggesting that AI can help smaller companies compete with larger organizations. The U.S. Chamber of Commerce’s 2025 report on technology and small business found that many small businesses were already using generative AI, with users reporting benefits such as increased efficiency and competitiveness. Meanwhile, the SBA Office of Advocacy’s research on AI adoption highlights how small firms are increasingly incorporating AI into their operations. Together, these findings point to a broader trend: AI is becoming a business tool that can help entrepreneurs accomplish more with limited resources.

But Gusto’s research adds an important layer: The potential benefit isn’t limited to saving money; AI may also help businesses grow enough to create jobs.

AI Adoption Doesn’t Guarantee Growth

There is an important caveat. Gusto’s research is based on businesses that participated in its survey and had sufficient payroll histories to track employment changes. The findings show an association between AI adoption and faster hiring; they don’t prove that AI alone caused every business to grow.

Businesses that adopt AI may also be more willing to invest, experiment or expand in other ways.

That means owners shouldn’t assume that purchasing an AI tool will automatically lead to higher revenue or additional employees—the technology still needs to solve a real business problem.

What Should Owners Do Next?

Start small.

Identify one repetitive task that consumes valuable time. It could be drafting customer communications, organizing information, preparing marketing content or handling routine administrative work.

Test an AI tool, measure whether it saves time, and consider how those savings could be reinvested into the business. Could you serve more customers? Take on additional projects? Improve customer service? Hire someone to handle work your business currently can’t accommodate? Those are the questions worth asking.

Financing Growth in an AI-Enabled Business

For small business owners, the takeaway from Gusto’s research is encouraging: AI may be more than an efficiency tool. When used thoughtfully, it could help create the capacity needed to expand a business and hire more employees!

That growth may require additional working capital for hiring, equipment, technology or marketing.

ARF Financial offers small business financing options to help business owners like you pursue those opportunities. So whether you’re investing in new technology, expanding your team or preparing to serve more customers, access to flexible capital can help you turn productivity gains into sustainable business growth.