- Poll 4,034 small business owners.
- 52% fear that AI-driven job shifts could create a lost generation of workers, leaving many small businesses struggling to function.
- Infographic included.
A recent Goldman Sachs report paints an optimistic yet challenging picture: 78% of small businesses are eyeing growth in 2025, and nearly half (46%) plan to bring on new hires to make it happen. However, the drawback is that 89% of these companies can’t find the right people for the job. One big reason? Students are increasingly wary of jumping into careers where artificial intelligence (AI) might soon elbow out entry-level roles. This hesitation is drying up the talent pool, and small businesses – many still dragging their feet on AI adoption – are feeling the pinch most acutely.
To dig deeper into this, Alta Technologies polled 4,034 small business owners, asking what’s keeping them up at night and how they’re scrambling to fill the gaps.
Over 1 in 3 Illinois small business owners surveyed (35%) say hiring has become more challenging because job seekers are avoiding roles that AI could make redundant in the near future (this compares to a national average of 52%). However, nowhere is this more glaring than in Colorado, where 72% of small business owners say they are experiencing recruitment problems. Maryland business owners, however, seem to be less affected, with just 18% reporting the same issues.
On top of that, small firms are competing with corporate giants for talent. Seven in ten owners (68%) significantly feel the effect from this rivalry – 24% call it a significant challenge, while 44% say it’s a serious issue. Just 7% say it is not a problem.
Some Illinois businesses are leaning on AI to plug the holes or cut back on junior hires, but most aren’t sold yet. The survey shows only 35% have jumped on the AI bandwagon, while 65% are holding off, perhaps watching from the sidelines.
Even so, plenty of business owners aren’t sitting idle. When asked how they’re tackling the talent drought:
- 30% are rolling up their sleeves to train and upskill their teams.
- 20% are sweetening the deal with better pay or perks.
- 8% are creating relationships with schools and universities for fresh recruits.
- 42%, though, admit they haven’t taken any proactive steps.
As we enter Spring 2025, two-thirds (67%) believe small businesses will bear the brunt of AI’s disruption, while larger corporations remain more insulated. Even more concerning, 52% fear that AI-driven job shifts could create a lost generation of workers, leaving many small businesses struggling to function.
Respondents identified industries which they believe most likely to get hit by AI’s hiring fallout:
- Retail and Customer Service (14%)
- Marketing and Advertising (13%)
- Education and Training (13%)
- Manufacturing and Logistics (12%)
- Administrative and Clerical Services (11%)
- Accounting and Bookkeeping (11%)
- Healthcare Support (11%)
- Hospitality and Food Service (6%)
- Legal Services (5%)
- Transportation and Delivery (5%)
Beyond the hiring challenges, small business owners are wrestling with shaky economic ground – such as shifting tariffs and markets that are highly volatile. Alta Technologies asked managers around the country how they’re feeling about the year ahead, and the mood is gloomiest in these cities:
1. Wilmington, DE
2. Manchester, NH
3. Seattle, WA
4. Denver, CO
5. Tulsa, OK
6. Wichita, KS
7. Irvine, CA
8. Glendale, AZ
9. Visalia, CA
10. Miramar, FL
“Small businesses are caught in a real bind,” says Corey Donovan, President of Alta Technologies. “They’re itching to grow, but finding and holding onto talent is increasingly challenging. With AI set to impact careers, businesses who pivot fast will come out on top in this new landscape.”
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