Small Business Outlook: Hiring Concerns Continue into New Year

Small businesses are looking to expand, but not necessarily through employee growth.

The U.S. Chamber's State of American Business 2026 event took place on Thursday, January 15. As the United States approaches its 250th anniversary, U.S. Chamber of Commerce President and CEO Suzanne P. Clark unveiled a bold vision in her annual address for how the business community can help shape the nation’s next chapter. Watch here.

ICYMI - Q4 Small Business Index: The Q4 2025 MetLife and U.S. Chamber Small Business Index is out with data on workforce trends and more.

New Small Business Data

WSJ/Vistage Small Business Small Business CEO Confidence Index (January 29, 2026)

Summary: Main Street confidence held steady in January and expansion plans do not necessarily equate to more employees and more revenue. 

• 24% of small business owners say the economy has improved compared to a year ago (2 points higher than December) and 34% say the economy has gotten worse (9 points better than December).
• 34% of small business owners believe the economy will improve in the next 12 months (1 point higher than December) and 23% believe the economy will worsen (3 points better than December).
• 50% of small businesses plan on increasing employees in the next 12-months (9 points lower than December) and 7% plan on decreasing employees (2 points higher than December).
• 32% of small businesses are expecting to increase fixed investments (1 point lower than December) and 53% expect fixed expenditures to remain the same (2 points higher than December).
• 67% of small businesses expect increased revenues in the next 12 months (2 points lower than December) and 10% believe revenues will decrease (2 points worse than December).
• 56% of small business owners believe profitability will increase in the next 12 months (2 points higher than December) and 13% believe that profitability will decrease (3 points worse than December).

2025 OnDeck + Ocrolus Small Business Q4 Cash Flow Trend Report (January 28, 2026)

Summary: Main Street confidence continued to steadily rise throughout 2025 as did AI adoption.

• 94% of small businesses anticipate moderate to significant growth over the next year (1 point higher than last quarter) and 29.1% anticipate significant growth (1.9 points lower than last quarter).
• 31% of small business owners cite Inflation as their highest concern (1 point higher than last quarter). 
• 60.7% of small business owners will pay down existing debt with any excess cash flow realized from 2025.  18.8% will build cash reserves.  6.6% will increase capital investments.  4.3% will increase marketing or customer acquisition spending. 3.4% will hire more staff and 2.6% will raise wages.
• 44% of small business owners reported changing their business operations to mitigate negative impacts caused by tariffs.  The most common changes were passing along price increases to customers (30.3% of those who changed operations), seeking alternative suppliers (13%), and adding products or services (9.4%).
• 56% of small business owners have incorporated Artificial Intelligence (AI) into their operations (4 points higher than last quarter).

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Gusto Insights, Employee Bonus Payments at Small Businesses in 2025 (January 14, 2026) 

Summary: Small employers invested heavily in employee retention in 2025. 

• The average bonus paid to employees at small businesses in December 2025 ($2,789) was 11% higher than end-of-year bonuses paid in 2024.
• The percentage share of employees at small businesses rose 18% in 2025 compared to the prior year.
• While not all employees in all sectors received higher bonuses in 2025, the share of workers who received bonuses rose across the entire economy.
• Tourism & Accommodations witnessed the highest increase in bonuses (+52% in 2025 compared to the prior year) followed by Entertainment & Recreation (+45%).
• The share of employees in the Manufacturing sector who received bonuses increased 17% compared to 2024 and the share of employees in the Construction sector increased 11.8%.

NFIB December Small Business Optimism Index (January 13, 2026)

Summary: Economic conditions are generally favorable for Main Street employers heading into the new year.  

• 24% of small business owners expect the economy to improve in the next 3-months (9 points higher than November).
• 13% of small business owners believe it is a good time to expand their business (no change from October and November).
• -8% of small businesses reported higher sales in the past 3-months (1 point better than November) and 10% of small business owners expect higher sales in the next 3-months (5 points lower than November).
• 19% of small businesses reported labor quality as their top concern (2 points lower than November) and 9% reported labor costs as their top concern (1 point higher than November).
• 12% of small businesses listed inflation as their top concern (3 points lower than November). 
• 33% of small businesses reported job openings they could not fill (no change from November) and 91% of those trying to hire reported few or no qualified applicants (2 points higher than November).
• 53% of small businesses hired or tried to hire in October (3 points lower than November) and 17% of small businesses plan on hiring in the next 3-months (2 points lower than November). 
• 31% of small business owners raised compensation in the past 3-months (5 points higher than November) and 24% plan on raising compensation in the next 3-months (no change from November).
• 30% of small businesses raised their prices (4 points lower than November) and 28% are planning on raising prices in the next 3-months (2 points lower than November).
• 56% of small business owners reported capital outlays in the last 6-months (4 points higher than November) and 19% are planning capital purchases in the next 3-months (1 point lower than November).
• -5% of small business owners expect better credit conditions in the next 3-months (no change from November).
• Small businesses paid an average rate for short maturity loans of 8.4% (0.5 points higher than November) and 25% of small business owners report borrowing on a regular basis  (2 points higher than November).

Honoring America's Top Small Businesses

Celebrating America's Top 100 Small Businesses

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GoDaddy Small Business Research Lab | 2025 Year-End Report (December 22, 2025)

Summary: Annual study of small businesses (5,000 in 2025) that have a GoDaddy domain and an active website.  Microbusinesses’ (fewer than 10 employees) impact on job creation and increased household income for surrounding communities is on the rise. 

• 65% of those surveyed are first-time business owners.  95% of those surveyed have fewer than 10 employees and 65% are solopreneurs.  
• 45% of those surveyed say their business is main source of income. 40% use business revenue as supplemental income and 15% say their business provides no income.
• Microbusinesses (defined as having fewer than 10-employees) created more than 8 new jobs in their respective county in 2025 (analysis by GoDaddy/UCLA Anderson Forecast Microbusiness Activity Index).  That is an increase of 6 jobs per county compared to 2020.
• Every 1% increase in household microbusiness ownership within a community correlates with 2% rise of income (approx. $1,500 over 3-years).
• 29% of small business owners believe 2025 end-of-year sales will be higher than 2024.  26% believe sales will be lower and 37% expect same level of sales year-over-year.
• 66% of small business owners believe that revenue over the next 6-months will be steady or increase.  24% believe revenue will decrease.
• 2/3 of small business owners say most of their customers live within their city or state and 69% rely on domestic supply chains.  78% of small businesses do not export their goods or services.

MetLife & U.S. Chamber of Commerce Small Business Index for Q4 (December 10, 2025)

Summary: Index shows a dip in confidence, revenue expectations, cash flow, and plans for investment. Inflation remains the top concern albeit trending downward. Note: Survey was in the field during the government shutdown.

• 70% of small businesses are confident in the health of their own business (2 points lower than last quarter) and 74% are comfortable with their current cash flow (2 points lower than last quarter).
• 43% of small business owners are positive about the health of their local economy (3 points lower) and 28% are negative (4 points worse than last quarter).
• 38% of small business owners are positive about the nation’s economic health (2 points lower than last quarter) and 44% are negative (2 points worse than last quarter). 
• 45% of small business owners rank inflation as their top concern (1point lower than last quarter and the 16^thconsecutive quarter where inflation tops the list).
• 65% of small business owners expect to increase revenue in the next year (4 points lower than last quarter).
• 23% of small business owners reported adding staff over this past year (5 points less than last quarter) and 68% reported keeping the same number of staff (4 points higher than last quarter).
• 42% of small business owners expect to increase staff in the next year (2 points lower than last quarter) and 49% expect to maintain current staffing levels (3 points higher than last quarter).
• 17% of small business owners cited employee retention as their top concern (highest level in 8 ½ years). 

Explore More Small Business Insights

The U.S. Chamber's SVP of Small Business Policy Tom Sullivan appears regularly on ASBN - America's Small Business Network and hosts a weekly podcast to deliver fresh insights on small business to viewers and listeners nationwide.

Watch Tom Sullivan talk all things small business with Jim Fitzpatrick on ASBN (America's Small Business Network), including the latest news and policy updates for Main Street business owners. New episodes are added every month so that you can watch them anytime.

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About the author

Thomas M. Sullivan

Thomas M. Sullivan is senior vice president of small business policy at the U.S. Chamber of Commerce. Working with chambers of commerce and the U.S. Chamber’s nationwide network, Sullivan harnesses the views of small businesses and translates that grassroots power into federal policies that bolster free enterprise and reward entrepreneurship. He runs the U.S.

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