Positive Jobs Data, Blue-Collar Millennials, AI Deployment Gets Assist

Hey everybody, it's Gene Marks, and welcome to this week's episode of the Paychex Thrive Week in Review. Thank you so much for joining us. This is the weekly podcast that we take a few items of news that impact your small business and mine, and we talk a little bit about them, right? So, let's get into it.

This week Paychex released their Small Business Employment Watch, and the news was pretty good. Small business hiring continued to strengthen in June, according to the latest Paychex Small Business Employment Business Watch, or Business Employment Watch. The small jobs index rose for the fourth consecutive month, matching its highest level since August of 2025 and signaling improving employment conditions among businesses with fewer than 50 employees.

Wage growth remained moderate with hourly earnings increasing about 2.7% year over year, suggesting labor costs are stabilizing after several years of elevated increases. The report, based on payroll data from roughly 350,000 small businesses, indicates that while hiring is still below long-term averages, employers are becoming more confident about adding workers.

For small business owners, the data points to a healthier labor market and easing wage pressure, making it somewhat easier to recruit and retain employees while keeping payroll costs under control.

Payrolls data also coincides with other data from the Department of Labor. They also released that the U.S. economy had added jobs, as well as job openings themselves have increased recently. The labor market itself – and there was another article in the Wall Street Journal about how the labor market is still holding pretty steady, if not growing even in the wake of everybody's concerns about the economy, it seems that businesses and small businesses continue to hire.

My only thing that concerns me about the Paychex report is the hourly earnings increase, which is on an average of 2.7%, you know, for the year. You know, again, it's good news for small business owners trying to trying to keep our costs under control, but let's not forget that inflation is around 3%, as well, or somewhere between 2% and 3%. So, you know, hourly earnings just about keeping up with inflation, if so, and that obviously to me is a you know causes me concern about spending by those workers, which ultimately you know turns into consumer spending, which ultimately affects all of us, right?

So, you know, hopefully hourly earnings will increase to stay above significantly the level of inflation. There's certainly that way for salaried workers when I read other reports. But that is my only concern out of what is otherwise really good news about hiring, employment, and the job market, particularly among U.S. small businesses.

And listen, just a quick note before we go deeper into our conversation. It's moments like this, talking about the challenges we face as business owners that remind me how important the right support can be. That's where Paychex does come in. They're trusted by nearly 800,000 businesses to handle pay HR, payroll, and benefits. It's like having a reliable partner who's got your back so you can focus on growing your business and leading your team.

So, take a minute after the podcast to see how they can help you at paychex.com/meetpaychex. So, that's P-A-Y-C-H-E-X.com forward slash M-E-E-T-P-A-Y-C-H-E-X. You can also find the link in our show notes.

Okay, let's get back to the conversation. Our next bit of news comes from Forbes. It's about Millennials buying businesses. A growing number of Millennials, according to this Forbes report, are purchasing blue-collar businesses, including HVAC, contractors, plumbing companies, manufacturers, construction firms, and other skilled trade operations as a hedge against AI disruption.

Those businesses often generate steady cash flow, face less competition from automation, and benefit from a wave of retiring baby boomer owners that are looking to sell. Buyers are attracted by recurring revenue, established customer bases, and industries where hands-on work remains difficult to replace with artificial intelligence.

The article also notes that acquisition financing has become more accessible, creating opportunities for entrepreneurs who prefer an existing business over launching a startup. The trend reflects a broader shift towards acquiring durable service-oriented companies that combine stable earnings with long-term demand.

All right, so a lot to unpack on this story. First of all, if you're a Millennial or if you're anybody of any age, starting up for business from scratch is a lot of work and may not really be necessary because there is a growing number – and there will be a growing number – of older baby boomer, Gen X-type business owners like myself who are looking to sell their business over the next between now and the next 10 to 15 years, which I think creates a great opportunity for people looking to buy.

And let's not forget that Millennials are no longer the youngest generation in the marketplace. Millennials have been on the job now for a good 20 years. They've gotten their corporate experience. They are looking, many are looking to be entrepreneurs and have the knowledge and the wherewithal to do just that.

Buying a business from an existing business owner to me cuts down a lot of the effort involved in starting up a business, and then you can ultimately take that infrastructure – those employees, that customer base, that location – and turn it into your own thing.

I love the idea that more and more people are buying into the contracting business. Private equity firms are doing the same thing and they're doing it for a reason, because consumers need contractors. Businesses need contractors. We have HVAC systems and plumbing systems and electrical work and other kinds of construction work that always needs to be done whether it's in our house or in our businesses, and that creates opportunities.

Now, a lot of people are concerned about AI replacing jobs or replacing even entire businesses, and AI is going to have a big effect on jobs and businesses that are really related to the digital world and digital work. But obviously doing the work with your hands isn't like that, which means that we have some time, a lot of time, before robotics come into the workplace and start doing the work of actual workers. I don't think we're going to see that for a little bit.

So, yeah, buying up a contracting business, an HVAC business, a plumbing business, an electrician's business, it's a good move to make. They're profitable, they can be grown, they can be … you can grow them through acquisition, as well. They are a good source of income, a good kind of company to run, and it's a solid way to also avoid potentially being outmaneuvered by AI.

So, that's why a lot of Millennials are buying businesses and contracting hands-on businesses themselves, and I think that's a great trend and I expect that is going to continue. Strongly recommend it.

Alright, in this week's AI news, it comes from Microsoft. Microsoft is launching a $2.5 billion AI consulting venture, which I think might interest you. It certainly interests me. So, this is a report from Reuters. Microsoft has created a new business unit – a new business unit – called the Microsoft Frontier Company. It's backed by $2.5 billion of investments to help organizations deploy artificial intelligence more effectively.

Rather than promoting only Microsoft's own AI models, the company will help customers evaluate, integrate, and customize a variety of AI technologies, including open source and third-party models – not necessarily their own – to meet their specific business needs. Microsoft plans to embed thousands of AI and industry experts with enterprise customers to accelerate implementation and improve returns on AI investments.

The initiative reflects growing demand for businesses that want practical AI deployments instead of one-size-fits-all solutions.

For small businesses, the announcement signals that AI consulting and implementation services are becoming increasingly important, creating new opportunities for firms that want guidance on selecting and deploying AI tools that deliver measurable business results.

My personal story, guys, I run a technology and financial consulting firm outside of Philadelphia. There are 10 of us. We have for years implemented CRM – customer relationship management – applications. Over the past year, we have started to pivot, and we are doing more AI consulting projects, very similar to what Microsoft Frontier Company is doing. Now, we focus on small and mid-sized businesses. Microsoft Frontier Company is focusing on enterprise-level-size businesses, although I could see their services coming down to smaller businesses, as well.

It's a huge opportunity to service small businesses who want to get more efficient with AI. They really want to learn how to use it, learn how to deploy it, and learn how to benefit from it. So, if a lot of business owners can't figure that out, they're turning to consultants like myself and now Microsoft Frontier Company that can help them do just that.

So, depending on the size of your company, depending on where things stand, and by the way, it's still early, they just announced that Microsoft Frontier Company has been launched, but bookmark it, maybe come back in a couple of months. Check out how Microsoft Frontier Company is doing. Reach out to them and see if they can offer any consultants or consulting help that can take tools, not necessarily just Microsoft's, to help you use AI better in your business. I think it's a great thing that they're doing. I'm expecting to see a lot more firms open up AI consulting arms because there is such a big demand and a big need among businesses of all sizes to use AI much, much better.

My name is Gene Marks, and you've been watching or listening to the Paychex Thrive Week in Review podcast. A few things to take away. First of all, if you are in need of HR or payroll help in your business, consider Paychex. Go to paychex.com/meetpaychex. That's P-A-Y-C-H-E-X.com forward slash M-E-E-T-P-A-Y-C-H-E-X. Please follow this podcast on your podcast platform or on YouTube if you are enjoying the content so you stay up to date on our latest episodes.

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Hope you found this information helpful. I'll be back with you next week with more news that impacts your small business and mine. My name is Gene Marks. Thanks so much for watching or listening. Take care.

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