Job Growth Steady, Contracts Lack Handbook Alignment, Goldman Restricts AI

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 some news from the week and we talk a little bit about it.

But before we get started, it's never too late to think ahead when budgeting for your business. Did you know that there will be 53 weekly paydays in 2027? How about the difference in total pay periods depending on when your first bi-weekly payday is in the new year? The Paychex Payroll Calendar answers those questions. Plus, how to plan for the three paycheck months, and offers guidance on what might be the right pay period type for your business. Check out go.paychex.com/yecalendar. That's P-A-Y-C-H-E-X forward slash Y-E-C-A-L-E-N-D-A-R. The link is in the show notes.

Okay, let's get to the news.

Paychex reported that employment trends among U.S. businesses with fewer than 50 employees remained steady in October 2026. Paychex's small business jobs index stood at 99.21, reflecting continued stability in the pace of employment growth. Hourly earnings growth remained below 3% for the 26th consecutive month, indicating that wage increases continued at a relatively restrained pace.

Meanwhile, growth in weekly hours worked remained positive for the eighth consecutive month. Paychex said employers were meeting demand by increasing hours for existing employees. Together, these measures describe a small business labor market characterized by steady employment trends, moderate wage growth, and greater use of current staff.

The distinction between employment growth and hours worked is central to this release. Businesses can accommodate demand through additional employee hours without a corresponding acceleration in hiring. The report has focused specifically on small employers, so it's finding to describe that segment rather than the entire U.S. workforce, but as you and I both know by now, that segment represents probably about half of the U.S. workforce.

Good, resilient hiring, moderate wage growth – that is good for the economy. The thing that still concerns me is that average wage growth is still below 3% for the 26th consecutive month, and with inflation ranging between 3 to 4%, still represents a purchasing power problem and a reason that we have to be concerned as to whether people on hourly wages are still keeping up with their wages. But, it is what small businesses are paying, and that is what we should be doing, as well.

What is your wage increase going to be? Your hourly increase for 2027. We are targeting among most of my clients between three and three and a half percent. So, just keep that in mind when you're making your budgets for next year.

All right, in our next bit of news, you know, only 16% of employers feel confident that their employee employment contracts and handbooks reflect everyday working practices and are reviewed regularly. This is according to research from WorkNest. The survey involved 388 HR decisionmakers, with 309 responding on contracts.

Another 61% were only fairly confident about their alignment, while 22% lacked confidence. Just 49% had reviewed employment contracts within the past six months. Meanwhile, 18% did not know when contracts were last reviewed, and another 18% had either gone more than a year without reviewing them or acted only when problems arose.

WorkNest research warned that separately updated contracts, policies, and management practices can create conflicting expectations for employees and managers. Changes under the Employment Rights Act make coordinated reviews especially relevant. The firm recommended examining employment documentation collectively, identifying which provisions should be contractual, where flexibility is useful, and whether written terms accurately represent both legal requirements and how the organization is actually operating it.

By the way, that article was found in Personnel Today. Just be aware, your contracts themselves need to be consistent. You should have your forms together in one place. You should be working off of the same template. You should have a policy and procedure to make sure those contracts are consistent.

When it comes to your employee handbook, you need to make sure that you are updating that annually. If you're not doing that internally, use an outside service; Paychex offers those services, but lots of other people do, as well. Your employment handbook, your employee handbook, has got to reflect your most recent policies and trends going on in your business, and it has to be something that is got to go at least under an annual review.

So, make sure that your employee handbook is reviewed annually. And number two, make sure that any contracts that you're using when it comes to employment are based off a template and go through a good review process and make sure they are consistent with prior contracts that you have issued.

Finally, in AI, Goldman Sachs has restricted access to advanced AI coding tools after allowing their bankers and traders to experiment with them for several months. Internal guidance revised in October, reserved tools including Anthropic, Claude Code and Microsoft's GitHub primarily for engineers, while quantitative specialists known as strats remained exempt now from using these tools.

Some traders reportedly objected because they had used tools to monitor client trading flows, model market movements and positions, and produce written and visual trading flow … trading materials. The change follows earlier encouragement from Chief Information Officer Marco Argenti, who described non-technical employees building prototypes that engineers could refine. Goldman said its experimentation process evaluates productivity and risk management before assigning tools to employees and its best position to use them over time. The decision is narrowing access to particular encoding capabilities while broader AI adoption does continue.

Reporting does not establish that specific any kind of specific security incident that caused this, you know, or quantify how many employees ultimately lost access to them.

So, the takeaway on, you know, from this is that big firms like Goldman, and I'm seeing this a lot with other companies as well, they went all in when it came to AI and developing solutions with A and allowing anybody in the company to do just now. Now, they're still starting to see that some of this stuff can be pretty dangerous and also have an impact on some of their data and information. And clearly, firms like Goldman Sachs have to take the right kind of precautions.

So, what are they doing? They are now re-evaluating the use of AI in their company and they are restricting any development being done to just specific people or groups or departments in their company, and pulling those rights back from other people that shouldn't be using AI tools to do development work. Maybe that's something you should be considering in your company, as well.

One final thing before we go, Visa issued their holiday forecast. They said that holiday sales could go up to 4.5% over last year, the fastest pace since 2021. Just thought I'd throw that in as some interesting news as we start heading into the holidays. We'll have lots more news on the holiday sales and preparing for the holidays in the weeks to come.

Hey, my name is Gene Marks, and you have been watching or listening to the Paychex THRIVE Week in Review. Remember, if you'd like some help or tips in running your business, sign up for a Paychex THRIVE newsletter. Go to paychex.com/thrive. If you would, please follow us and subscribe to us on your favorite podcast platform or on YouTube.

And finally, if you would like some help setting your year-end calendar, remember 2027 is gonna have 53 weekly paydays. Go to paychex.com, go.paychecks.com/yecalendar. That tool will help you plan for what you need to know for paying your employees in 2027.

Thanks so much for watching or listening. We will see you again next week. Take care.

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.

And if you need help or advice or tips in running your business, get our Paychex Thrive newsletter. Go to paychex.com/thrive and sign up for it there.

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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