AI vs. People, Shopping Small This Holiday, Give Continued Recognition

Hey everybody, it's Gene Marks, and welcome to this week's episode of the Paychex THRIVE Week in Review. This is where we take a few items out of the news that impacts your small business and mine. We talk about it a little bit.

So, the first story has to do with AI, and this was reported by CNBC. An MIT-led study using its new Iceberg Index model found that today's AI systems are already capable of performing tasks equivalent to 11.7% of the U.S. workforce, representing about $1.2 trillion in wages. The analysis evaluated more than 900 occupations and 150 million workers, showing the highest exposure in routine office administrative, HR finance, and logistics roles.

The researchers stress that this figure reflects technical capability, not an immediate forecast of layoffs. Still, the findings suggest that AI driven disruption is likely to be broad based and more widespread than previously understood, affecting nearly every sector and state.

So yes, my take on this is that AI capabilities are getting better and better. I don't think they're anywhere near to having mass replacement of workers in our businesses. Most of my clients – I'm sure your business feels the same way – we're looking for good people. But what I do think is very, important is that we start really doubling down on training for our employees so they really start getting used to what AI can do to help them be more productive.

And my advice to you in 2026 is to start training with either Microsoft Office or Google Workspace. Get your employees really, really familiar with the AI capabilities of those office tools because that will then help them understand how to better use those tools to do a better job, be more productive, make your company more profitable. And, in addition to that, as more AI tools and capabilities come rolling out over the next few years, they won't be so terrified of them and they'll be more positioned to use them in a really good way.

So, yes, AI capabilities, according to the MIT study, are getting better and better, but we need our employees to take advantage of these tools because I don't think they're going to be replacing our people anytime soon.

And by the way, talk about not replacing people. And this is just a quick side note. Managing your team doesn't have to be complicated. I mean, no one's going anywhere anytime soon. From hiring the right people to getting them onboarded and keeping things running smoothly, Paychex has the HR tools and support you need to do it all. It's like having an extra set of hands when you really need it.

So, if you're curious, visit paychex.com/meet paychex. That's P-A-Y-C-H-E-X dot com forward slash M-E-E-T-P-A-Y-C-H-E-X. You can also find the link in our show notes.

Let's move on to our next story, and it has to do with the holidays. This is reporting on Morningstar.com. A new AT&T business survey found that 77% of U.S. consumers would do all their holiday shopping at small businesses if they could. Three-quarters say small retailers offer more unique and meaningful gifts and most shoppers prefer buying from small businesses when prices are comparable to big box stores.

The survey also shows that 67% choose small business to support their local economy, while 72% say in-person shopping gives them better gift ideas than browsing online or on social media.

Overall, the findings highlight strong consumer sentiment towards small businesses during the holiday season. Very, very good news if you are running a small business, and let's not limit it just to retail. I think a lot of B2B businesses have the same type of sentiment among consumers and other buyers. And, you know, small independent restaurants to shops and dry cleaners, if you are running a small business this holiday season, really take advantage of the sentiment that consumers feel towards your business because people really do appreciate, and they want to support small businesses around the country.

The more that you can be competitive with the big-box retailers, the easier it will be for consumers to make the decision to shop with you.

All right. The last story comes from Yahoo Finance, and it's about a new survey from Express Employment Professionals and the Harris Poll. It found that 99% of U.S. employers believe employee recognition is critical, with more than half saying it is absolutely essential. Yet nearly 45% admit that the lack of budget resources to adequately recognize employees this season is holding them back.

Employees overwhelming agree that recognition improves morale, engagement, productivity, loyalty, and retention. But, despite this, many workers say recognition is inconsistent with most raises tied only to major accomplishments rather than regular ongoing feedback. The report highlights a growing gap between the importance employers place on recognition and their ability to deliver it effectively.

So, guys, I can't say this more. We are living in a world right now where 50% of our employees are Millennial generation or Gen Z generation, as well. This is a generation that has grown up on constant feedback, right? I mean, you know, the social media and web, they expect to hear that from us, as well.

I can't tell you how many times I come across clients of mine that are still doing annual performance reviews where I think is very, very old school and out of date. It is critical that we have a system for performing constant feedback to our employees, giving them gifts along the way – whether it's gift cards or brought-in lunches on a Friday, barbecues, employee events, just showing that you care.

And, you know what? Even just stopping that employee just in the hallway and saying to them, “Hey, I really value what you're doing, and you're really doing a great job and really appreciate you being here.” Those kinds of things go a really long way. That's despite having an actual formal annual review.

So, really, really focus this year on giving continued feedback to your employees. They really need it. They enjoy it, and it will make them much more loyal to your business.

My name is Gene Marks, and you have been watching the Paychex THRIVE Week in Review. We hope you have enjoyed this information and helps you to run your business. If you do need other help in running your business like advice or tips, sign up for a Paychex THRIVE newsletter. Go to paychex.com/thrive.

Thanks very much for watching or listening. I'll be back with you next week with another three items in the news that impacts your small business and mine. We'll talk to you then. Take care.

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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