New data from 1,200+ small business owners and hourly employees reveals what's driving loyalty, where the gaps are growing, and how AI is reshaping the way small businesses operate.
The Homebase Top Local Workplace Awards celebrate small businesses that build environments where employees feel valued and connected. Now in its third year, the awards honor the workplaces this data describes. Learn more at joinhomebase.com/awards.
At Homebase, we believe the best workplaces aren't built at big corporations. They're built by the owner who knows every employee by name, who covers a shift when someone gets sick, and who stays late not because they have to, but because they care.
To understand what that looks like in practice, and where there are still gaps, we surveyed 605 small business owners and managers and 645 hourly employees across the U.S. in April 2026. We call the results of this survey the 2026 Homebase Local Workplace Pulse.
The headline finding: hourly workers are proud to work for small businesses. Genuinely, measurably proud. What's more interesting is why, and what it means for owners trying to build teams that last.
Executive Summary
Of the results from this survey of owners and hourly employees, a few key findings emerged:
- 86% of hourly employees are proud to work for a small business.
- Nearly 2 in 3 hourly workers (62%) aren't planning to leave their jobs in the next 3–6 months.
- Pay is the top reason employees would choose to stay or take a new job (80%), but owners estimate it at only 59%, a 21-point perception gap.
- Despite pay's dominance in retention decisions, employees rank it last when describing what makes a workplace great. Community tops the list at 60%.
- 72% of small business owners are currently using or piloting AI tools.
- Employees who have been with a small business for 5+ years are the proudest cohort of any segment. Employees who have been with a small business for five or more years are 50% more likely to feel deep pride compared to those in their first six months on the job.
- When offered comparable pay, hourly workers choose small businesses over large corporations at a near 5x ratio.
Small Business Pride is Growing
Small Business Pride by the Numbers
Despite a challenging macroeconomic environment, with persistent inflation, tariff uncertainty, and a cooling job market, hourly workers are proud to work for a small business and aren’t planning on switching jobs anytime soon.
86% of hourly employees describe themselves as proud to work for a small business. That's a workforce that feels connected to what they're doing and where they're doing it.
Owners feel this connection, too. 97% of small business owners say small businesses are important to their local communities, up 14 percentage points from 83% in Homebase’s 2024 Small Business Fulfillment Index. And 55% of owners feel financially stronger than they did a year ago, despite the economic turbulence.
62% of hourly workers are not planning to leave their current job in the next 3–6 months. For context: that number was also 62% in 2024. In two years of economic turbulence, workforce stability at small businesses has not budged.
Pride by Industry
Pride isn't uniformly distributed. Construction (63%) and Food & Beverage (51%) workers report the highest rates of pride.
Healthcare (50%) and Education (41%) score lower, but even these industries with notorious burnout clear the 40% mark on the pride threshold.
Loyalty Compounds Over Time
One of the most interesting findings in this data is that the longer hourly employees stay at a small business, the prouder they become.
Employees who have been with a small business for five or more years are 50% more likely to feel deep pride compared to those in their first six months on the job. That dip in the middle years is real, but the recovery at 5+ is decisive.
The implication is that the culture that keeps people is the same culture that deepens their commitment over time.
Pay Gets Employees In the Door. Community Keeps Them.
The Perception Gap
One of the sharpest findings in this survey is a consistent, measurable disconnect between what small business owners believe motivates their employees, and what employees actually say matters.
Pay is the #1 factor for employees when deciding to stay in or take a new job: 80% cite it as a top factor, up nearly 2x from 43% in 2024. Owners estimate that number at 59%, a 21-point gap on the single most important decision-maker. That gap has grown since 2024, when it stood at roughly 13 points.
Pay has never not been important. But, in a volatile economy, it’s become imperative. When asked how economic uncertainty has affected hourly workers’ jobseeking decisions, nearly 1 in 3 (29%) of workers are actively pursuing higher-paying opportunities.
Flexibility tells a similar story. 56% of employees name flexible scheduling as a top factor. Owners put it at 38% — an 18-point gap that’s more than doubled since 2024.
This blindspot varies by industry. Construction owners have the most acute pay blindspot, with 91% of their employees citing pay as a top factor, but only 67% of Construction owners think it matters. Healthcare has the widest flexibility miss, with employees cite it at 61%, owners at just 31%.
Small Business vs. Large Corporation: Who Wins at Equal Pay?
When hourly employees are asked to choose an employer type at comparable pay, small businesses win by a nearly 5x margin over large corporations: 38% choose small business versus just 8% who choose a corporation. Mid-sized companies come second at 31%.
The competitive problem for small businesses is compensation, not values. When they can close the pay gap, small businesses win in nearly every other dimension.
What Actually Makes a Great Place to Work
Here's the nuance that changes everything: pay is what gets workers in the door, but it's not what makes a workplace great.
When asked what defines a genuinely great workplace, not just a job, employees lead with relational answers. 60% cite "a strong sense of team and community" as a top factor. 49% cite "management that genuinely cares about employees as people." Competitive pay? It only ranks at 25%.
Owners answer differently. They put competitive pay first (54%). They're not wrong that pay matters. The data around deciding to take/stay at a job proves it does. But while pay is the threshold, community becomes the defining factor in a positive work experience.
And the number one reason employees say they'd choose a small business over any other employer type? Relationships (47%). Flexibility comes second (45%). Pay options don't even crack the top two.
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The best employers, including Homebase’s Top Local Workplace Awards winners, offer both stability and community to employees, making their companies a great place to work from day one.
AI Adoption Among Owners Is Strong
Where Owners Are Using AI
Small business owners aren't watching the AI wave from the shore. 72% of owners are currently using or piloting AI tools, and they're excited about its potential. What’s interesting is that AI adoption is growing over time; in June 2025, 65% of owners were using AI. More owners are seeing value in AI and are taking it for a spin to see where it can help them work smarter, not harder.
The biggest benefits owners expect to see from AI include automating tasks (47%), improved customer support (45%), better team communication (42%), and surfacing business insights before they become problems (41%). 21% of owners expect AI to create new roles at their business, more than the 18% who expect it to replace any roles altogether.
Owners using AI aren't trying to replace their teams. They're trying to get back to them. When scheduling, payroll, and communication run themselves, the time goes somewhere For the best small business owners, that time goes into the floor, the counter, and the people.
Two Years Later: What's Changed Since 2024
The 2026 survey was built on the 2024 Homebase Small Business Team Fulfillment Index. With two years of data, clear trends emerge. The perception gap between what owners believe employees want and what workers actually prioritize has widened on two key fronts: the pay gap grew to 21 points, up 8 points since 2024, and the flexibility gap more than doubled, reaching 17 points. Owners, on the whole, are drifting further from their employees' reality.
The community story, however, is moving in the right direction. Nearly 2 in 3 hourly workers (65%) say small businesses are very important to local communities, up 5 percentage points from 2024 . Owners feel it, too; look back to that 97% who said small businesses matter to their communities. That’s up 14 percentage points in two years. In a period of economic uncertainty, workers and owners alike are doubling down on small businesses. That shared conviction is the foundation worth building on.
About the 2026 Top Local Workplace Awards
The 2026 Homebase Local Workplace Pulse data captures what makes small businesses great places to work. The Top Local Workplace Awards exist to celebrate the businesses that are living it.
Now in its third year, Homebase's Top Local Workplace Awards recognizes outstanding small businesses across its network for building workplaces where employees feel valued, fulfilled, and proud. This year's honorees were identified through a proprietary scoring system that analyzed more than 1 billion data points across 150,000+ businesses in the Homebase network.
Methodology
The 2026 Homebase Local Workplace Pulse is based on a survey of 1,250 small business owners, managers, and hourly employees conducted by Propeller Insights in April 2026. Respondents were adults (18+) in the United States employed at or running small businesses across industries including food and beverage, retail, healthcare, construction, education, manufacturing, and hospitality. Owner/manager findings are based on n=605 respondents. Hourly employee findings are based on n=645 respondents.
Where noted, data is compared to Homebase's 2024 Small Business Fulfillment Index (n=1,290, fielded March 2024). Year-over-year comparisons reference the 2024 Homebase Small Business Team Fulfillment Index, conducted in March 2024 via survey to 1,290 active Homebase customers.
About Homebase
Our mission is to make small business teams unstoppable.
Homebase is the AI-powered platform for hourly teams, with employee scheduling, time clocks, payroll, hiring, communication, HR, and more. More than 150,000 small businesses rely on Homebase to make work radically easy and give their teams superpowers. As the leader in small business team management, Homebase tracked 1+ billion hours for 3.5+ million workers last year. Homebase was named a 2024 Fast Company’s Brands That Matter, a 2025 Webby Award winner, and a 2025 Fast Company’s Most Innovative Workplaces North America winner.
Homebase also earned recognition from top reviewers, including “Best Payroll for Hourly Teams (2024)” by USA Today, “Best Payroll for Small Business (2024)” by CNN Underscored, and “Best Small Business Payroll (2025)” by U.S. News & World Report.
Homebase is based in San Francisco, Houston, Denver, and Toronto. We are backed by leading venture investors L Catterton Growth, Emerson Collective, Notable Capital, Bain Capital Ventures, Khosla Ventures, Baseline Ventures, Cowboy Ventures, Bedrock Capital, and PLUS Capital.
