Pipedrive report reveals hiring challenges, retention strategies, and technology adoption shaping the SMB job market for the coming year
Pipedrive, the easy and effective sales CRM powering over 100,000 SMBs, today released its State of SMB Hiring Report, revealing how small and medium-sized businesses (SMBs) are adapting their workforce strategies amid one of the most challenging talent markets in recent years. Based on responses from 1,000 SMB hiring decision-makers across the U.S., the report offers a detailed look at talent scarcity, evolving retention strategies, and the accelerating role of AI in workforce planning.
In 2025, half of SMBs struggled more than ever to fill open roles, citing “finding qualified candidates” as their top challenge, far outpacing budget constraints and high candidate expectations. Nearly half said filling positions became more difficult compared to the previous year, while most businesses reported salaries and benefits rose by 5% or more. Despite these headwinds, nearly two-thirds of businesses are planning to allocate more resources towards expanding headcount or adding positions in Q1 2026.
"The small business hiring landscape in 2025 has been challenging in ways that often go unnoticed in broader labor market discussions," said Paulo Cunha, CEO of Pipedrive. "For SMBs, the core challenge wasn't about budget. It was about finding qualified candidates in an increasingly competitive market. Despite these obstacles, many pushed forward, expanding teams and doubling down on retention strategies. As we head into 2026, SMBs are showing a remarkable willingness to evolve, whether that's adopting AI, offering more flexible work models, or investing in their teams. That adaptability is what makes SMBs so vital to our economy, and it's why Pipedrive remains deeply committed to helping them thrive with the tools and insights they need to build stronger teams and grow with confidence."
Retention becomes just as critical as recruitment
With nearly half of SMBs reporting difficulty finding workers, keeping current employees has become as critical as hiring new ones. The top three retention strategies are competitive salary increases (45.9%), flexible scheduling and work arrangements (39%), and performance bonuses and incentives (36.5%).
Male hiring leaders most frequently cite competitive salary increases as key to retention, while female respondents prioritize flexible scheduling and work arrangements. Salary increases remain the top retention strategy across every region West 50.3%, South 47.1%, Northeast 43.7%, and Midwest 43.2%.
AI tools are reshaping how SMBs approach hiring
An overwhelming 84.1% of businesses are using or considering AI and automation tools, with 39.7% reporting that these technologies have reduced hiring needs. Two-thirds (66.1%) expect AI will change the types of roles they hire for in 2026, while 23.2% believe it will create demand for more specialized workers.
Clear generational divides in AI adoption
Respondents under 25 are the most aggressive adopters, with 27.5% saying AI significantly reduced their hiring needs. In contrast, nearly one-third (31.8%) of those aged 55-64 aren't using AI and don't plan to consider it. Younger decision-makers also show more appetite for growth, with 51.3% of those under 25 planning to add positions in 2026, compared to 36.5% of 45-54 year-olds.
Pipedrive's State of SMB Hiring Report is part of the company's ongoing commitment to empowering businesses with actionable insights and tools that drive success. As the hiring landscape continues to evolve, Pipedrive remains focused on delivering solutions that help SMBs maximize efficiency, build stronger teams, and navigate uncertainty with confidence.
Methodology
This report is based on a national survey of 1,000 professionals who make hiring decisions or have input on hiring decisions at a small to medium-sized business (less than 500 employees).
Respondents answered quantitative questions about hiring challenges, budget allocation, retention strategies, technology adoption, and workforce planning. Data was collected in November 2025 via a structured online questionnaire.
To learn more about The Pipedrive State of SMB Hiring Report, you can download the full report here.
About Pipedrive
Founded in 2010, Pipedrive is the easy and effective sales CRM that drives small business growth. Today, Pipedrive is used by revenue teams at more than 100,000 companies worldwide. Pipedrive is headquartered in New York and has offices across Europe and the US. The company is backed by majority holder Vista Equity Partners, and Bessemer Venture Partners, Insight Partners, Atomico and DTCP. Learn more at www.pipedrive.com.
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