Small Employers Added 28,000 Jobs in October — And Job-Switchers Got 7.6% Raises

If you have been wondering whether anyone is still hiring, October's numbers say yes — and small employers are a big part of the story. Payroll provider ADP reported on November 4 that private employers added 86,000 jobs last month, and establishments with fewer than 50 workers accounted for 28,000 of them. The bigger surprise for owners is what happened to pay for people who switch jobs.

What ADP Reported for October

ADP's National Employment Report put private-sector job growth at 86,000 in October. Hiring was spread across every size of business, which ADP chief economist Nela Richardson highlighted when she noted that employers of all sizes were adding workers.

Here is how the jobs broke down by establishment size:

• 1 to 19 employees: +21,000 jobs
• 20 to 49 employees: +7,000 jobs
• 50 to 249 employees: +22,000 jobs
• 250 to 499 employees: +11,000 jobs
• 500 or more employees: +24,000 jobs

ADP groups the first two rows as "small" businesses, which together added 28,000 jobs. Medium-sized firms added 33,000, and large firms added 24,000. The size categories and the headline total differ slightly because of rounding in the source data.

The smallest businesses, those with 1 to 19 workers, contributed the single largest small-business slice. For a Main Street owner running a shop, a crew, or a small office, that is a useful signal: you are not the only one adding a person or two.

The Number Owners Should Circle: 7.6%

Pay growth is where the report gets uncomfortable for anyone trying to hire. ADP measures annual pay growth in two ways, base pay and gross pay (which includes bonuses and overtime). Here is the October picture:

• All workers: base pay up 3.2%, gross pay up 4.7%
• Job-stayers: base pay up 3.0%, gross pay up 4.4%
• Job-changers: base pay up 4.8%, gross pay up 7.6%

That last line is the headline. Workers who changed jobs saw total pay rise 7.6% from a year earlier, and ADP says earnings growth for these workers reached its fastest pace since March 2024. Richardson pointed to a mix of bonuses, overtime, extra hours, and higher base pay as the reasons job-changers are earning more.

Put simply, there is now a gap of about 1.8 percentage points between base-pay raises for people who leave (4.8%) and people who stay (3.0%). If your current staff is getting 3% while the market is paying new hires closer to 5% in base pay, you have a retention problem waiting to happen.

Where the Jobs Were — and Weren't

Service-providing industries added 82,000 jobs, while goods-producing industries added just 4,000. A few details that matter to owners:

• Trade, transportation, and utilities: +39,000
• Education and health services: +28,000
• Leisure and hospitality: +19,000
• Financial activities: +15,000
• Construction: +13,000
• Other services: +10,000
• Professional and business services: -27,000 (the third straight monthly decline, according to one summary of the report)
• Natural resources and mining: -8,000

Geography was lopsided too. The South added 47,000 jobs, led by 35,000 in the West South Central region (which includes Texas). The West added 28,000, the Midwest 9,000, and the Northeast just 3,000. If you operate in the Northeast, expect a quieter labor market than the national headline suggests.

What This Means for Your Hiring Plans

One month of data is a snapshot, not a trend. But the October report gives you a few practical reasons to review your plans now rather than in January.

1. Check your pay against the market for new hires

If you posted a role at last year's rate and have been getting few applicants, the 4.8% base-pay increase for job-changers may explain why. Compare your offer to current local postings before assuming there is a talent shortage.

2. Look at total pay, not just the hourly rate

Job-changers' gross pay rose 7.6%, well above their 4.8% base-pay gain. That gap reflects bonuses, overtime, and extra hours. Small employers that cannot raise base wages every year can sometimes compete with a signing bonus, a seasonal bonus, or reliable overtime — though overtime has its own cost and compliance rules, so plan it carefully.

3. Don't let loyal staff fall behind

Job-stayers got 3.0% base raises. That is lower than inflation concerns many owners are tracking, and well below what a competitor may be offering to poach them. A small, targeted raise for your best people is usually cheaper than replacing them.

4. Plan for hiring in the right form

Before you add headcount, decide whether the role is truly an employee role. Misclassifying workers can be costly, and several states are tightening the rules. Our guide on independent contractor vs employee walks through the tests that matter.

5. Run the numbers before you commit

A new hire costs more than a wage. Payroll taxes, workers' compensation, and benefits all add up, and your cash flow has to carry the person until they produce revenue. Pull up your profit and loss statement and model the hire at the higher pay rate you may need to offer. If you need capital to bridge the gap, review your options in our SBA loan guide.

How Owners Can Use the Data

ADP's report covers its own client base of private-sector payrolls, so it is a useful gauge, not a census of every small business in America. It also arrives ahead of the government's official jobs report, which can differ. Treat the numbers as directional.

The direction, though, is clear enough to act on. Hiring is broad rather than concentrated in big companies. Workers who move are getting meaningful raises. And the places where small businesses are strongest — trade, health services, hospitality, and construction — are the places adding jobs.

If you are planning to hire in the new year, start the conversation with your accountant now. Decide your budget, confirm the classification of each role, and set aside time to review your current team's pay. Doing it in November, before the holiday rush and year-end filings, gives you room to make good decisions instead of rushed ones.

The Bottom Line

October brought 86,000 private-sector jobs, 28,000 of them from small employers, and a 7.6% gross pay gain for people who switched jobs. For owners, the message is straightforward: the labor market is competitive for good people, and the cheapest hire is usually the employee you already have. Review your pay, protect your best staff, and build any new hire into a realistic budget before you post the job.

Source: ADP National Employment Report, October 2026, released November 4, 2026. Figures are reported by ADP and are subject to revision.

Photo by Eric Prouzet on Unsplash