Paychex CEO on Small Business Health, Labor Market Challenges, and Economic Outlook

Small Business Job Market Stability

• 📊 The small business job index has remained relatively stable throughout 2025.
• 📉 There is continued moderation in wage inflation.
• 👥 Same-store workforce levels across Paychex's entire client base are essentially flat for the quarter.

Challenges in the Small Market

• ⚠️ Businesses are facing particular challenges in the small end of the market when it comes to finding qualified employees.
• 💰 Clients are also managing costs, leading to fewer purchases of ancillary attachment products than expected.

Overall Economic Health and Outlook

• ✅ Despite challenges, small businesses are healthy overall.
• 📈 The macro environment is considered solid, with no signs of recession.
• 🔮 Looking ahead to 2026, there is optimism due to potential tax clarity and interest rates beginning to ease.