Jobs and Wages Steady, Skipping PTO Causes Burnout, Growth Targeted in 2026

Hey, everybody, it's Gene Marks, and welcome back to this week's episode of the Paychex Thrive Week in Review. This is where we take a couple of items of news in the headlines that impacts your small business and mine, and we talk a little bit about them. So, let's get to it.

First of all, this week, the U.S. small business employment trends hold steady as we start off 2026, that's according to the Paychex Small Business Employment Watch. The Paychex Small Business Employment Watch January 2026 report shows that job and wage growth trends among U.S. businesses with fewer than 50 employees remained largely consistent at the start of the year.

The Small Business Jobs Index ticked up slightly in January, indicated modest employment growth compared with December. Hourly earnings growth held steady at about 2.68%, roughly unchanged since mid-2025. According to Paychex leadership, this stability suggests the small business sector continues its moderate expansion without significant wage inflation pressures, although ongoing challenges persist, especially around recruiting qualified labor and managing rising health care costs.

The report reinforces that small business hiring and wage trends have not sharply accelerated or declined, pointing to a steady labor market environment as 2026 gets underway.

I view this with mixed feelings. I think that it's great that small business owners continue to employ, and we have not seen a drop off in employment. The wage growth number, though, does concern me at 2.68% – that is annualized. As we all know, inflation is about 2.4% now. It's barely above inflation; These are for hourly workers. So, it concerns me about those hourly workers keeping up with inflation if wage increases are at that level.

But the good news is, that employment continues to remain steady among small businesses throughout the U.S., according to the Paycheck Small Business Employment Watch.

Okay, on to our next study. This comes from the Philadelphia Business Journal at bizjournals.com. Employers are issued a wake-up call over alarming employee burnout and PTO fears. A Philadelphia Business Journal piece highlights growing workplace burnout, especially among younger workers and how it intersects with fears around taking paid time off or PTO.

Based on surveys and expert commentary, including input from Career Minds and elevated … and other workforce analysts, significant portion of Gen Z and early career employees report elevated stress levels guys, affecting productivity, mental health, and job satisfaction.

Many workers are reluctant to use their PTO due to concerns about career progression or stigma from leadership, even as burnout rates reach highs not seen in recent years. Employers are advised to re-evaluate workplace culture, support systems, and PTO policies – and better adjust employee well-being and retention.

Broader trends such as shifts in expectations around work-life balance, mental health resources, and organizational flexibility are now top priorities for recruiting and retaining talent.

So, here's the takeaway from me as a business owner. We know that providing the benefits of health insurance and retirement are very, very important for employees, but flexibility and work-life balance is basically number three – and even gaining in importance among both our current and prospective employees.

You know, half the workforce now are Millennials and Gen Z. They are a different culture and a different generation, and they value their work-life balance. As we see by some of these surveys, they're concerned about even admitting that they're burned out or even taking PTO. As employers, we really, really have to be keeping an eye on that. It is not helping us when our employees are overworking. It's really not.

You want your employees to take time off. You want them to be balanced. You want them to be happy and satisfied in their jobs because you want to retain them for a long time. And if all we're looking to do is kind of squeeze every last bit of sweat and blood out of them, that is not a long-term solution for keeping good employees in our business. So, pay heed to this wake-up call that was reported in the Philadelphia Business Journal this past week.

Hey, by the way, as a side note, managing your team doesn't have to be complicated, right? From hiring the right people to getting them onboarded and keeping things running smoothly, which includes watching for signs of that employee burnout and doing something about it. Paychex, Paychex has the HR tools and support that you need to do it all, okay? It's like having an extra set of hands when you really need it.

If you are doing this yourself, get help. Turn to a company like Paychex to take over some of those HR roles so that you are doing a better job at managing your employees and giving them more balance. Go to paychex.com/meetpaychex. That's www.paychex.com forward slash M-E-E-T P-A-Y-C-H-E-X. You can also find the link below in our show notes.

Okay, so let's get to our last story and that has to do with small businesses plans for 2026. According to Constant Contact – the big email marketing platform – small businesses are doubling down for 2026 and a majority plan to increase investment amid economic uncertainty.

This new Constant Contact small business now survey showed that a majority of small business owners are planning to invest more, not less, in 2026 despite economic headwinds such as inflation and rising costs. Roughly two-thirds of small and mid-sized businesses plan to increase their marketing spending this year, with many also dedicating more time to strategic growth efforts rather than cutting budgets in uncertainty.

Owners are focusing on efficiency and smart investment rather than cost cutting. Many are adopting or expanding the use of AI tools to boost productivity and enhance a competitive edge. The findings suggest a resilient mindset among SMB leaders who see strategic investment as a key path to growth and market strength in 2026.

So, two pieces this week, one from Constant Contact, their survey saying that businesses are being resilient. They're of doubling down their investing. They're going to be spending more on marketing in 2026. And Paychex, the Small Business Employment Watch showing that small business owners hiring continues to stay moderate and consistent as we head into 2026.

It seems as if small businesses are prepared for a pretty decent year and ready to take advantage of the economy as it grows in 2026. We shall see.

My name is Gene Marks, and you have been watching or listening to this week's episode of the Paychex Thrive Week in Review. I hope you got a lot of good information out of it.

If you would like some advice or tips or help in running your business, visit us at paychecks.com/thrive and you can sign up to our newsletter. If you need any help with your HR needs – and we all do – go to paychecks.com/meetpaychecks. Therefore, you can find out all the ways that having a great HR platform can help you grow your business. In the meantime, I hope you got a lot of value out of this week's news and information and some of my thoughts on this, as well.

We'll be back to you next week with another episode of the Paychex Thrive Week in Review, where we'll talk about some of the news that impacts your business this coming week and some of my thoughts about that. My name is Gene Marks. Thanks for joining. We'll see you next week.

Do you have a topic or a guest that you would like to hear on THRIVE? Please let us know. Visit payx.me/thrivetopics and send us your ideas or matters of interest. Also, if your business is looking to simplify your HR payroll benefits or insurance services, see how Paychex can help. Visit the resource hub at paychex.com/worx. That's W-O-R-X. Paychex can help manage those complexities while you focus on all the ways you want your business to thrive.

I'm your host, Gene Marks, and thanks for joining us.

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