New Data: While Small Businesses Turn to AI for HR, Demand for Human Remote Hires Is Growing Even Faster

More than 70% of small businesses are exploring or already using AI for payroll and HR tasks, according to new ADP research. On paper, that reads like small businesses expect AI to close their labor gap. New data from VA Masters suggests something different is happening 

underneath.

While AI adoption climbs for admin-heavy tasks, client demand for actual human hires through VA Masters, a global recruitment agency for vetted Filipino virtual assistants, has grown even faster over the same stretch, with new client signings more than doubling between the first and second quarter of 2026. AI isn't replacing the hire. It's running alongside it.

Alon Pearl, remote hiring expert and Founder & CEO of VA Masters, comments:

“AI is great at the paperwork side of things, running payroll, answering a policy question, that kind of thing. It's not great at taking a customer call, juggling a calendar full of moving pieces, or making the small judgment calls that come up every day in a business. That part is still human work. What's changed is business owners realizing that person doesn't need to be sitting down the hall from them.”

He adds:

“For a while everyone assumed AI would mean less hiring. What we're actually seeing is almost the opposite. Owners use AI to clear out the busywork, then turn around and hire a real person for everything that still needs a human touch. It was never going to be one or the other. AI takes the paperwork, a person takes the rest.”

Key findings:

1. AI adoption hasn't slowed hiring, it's running in parallel. Client demand for human hires more than doubled quarter over quarter in 2026, the same window AI use for HR tasks was climbing.

2. Businesses aren't outsourcing to a bot, they're outsourcing to a vetted person. VA Masters places only 1 in 508 applicants who apply, a selectivity rate with nothing to do with automation.

3. It's not a downgrade from a "real" hire. 80% of hired candidates are fluent or native English speakers, and 65% bring 3 or more years of relevant experience.

4. Once businesses commit to a person, they add more people, not more software. 1 in 5 clients expand beyond a single hire.

What this suggests for how small businesses should be thinking about AI and hiring together:

• Use AI for the repeatable stuff, not the relationship-facing work. Payroll runs, scheduling templates, and basic reporting are safe to automate. Customer-facing or judgment-heavy tasks generally aren't.

• Don't assume a smaller team means fewer people. Many businesses adopting AI are still adding headcount, they're just adding someone who works remotely.

• Test before scaling. Most businesses in this data start with a half-time engagement before deciding to expand further.

Pearl adds: “The businesses getting the most out of AI aren't the ones using it to replace people. They're the ones using it to free up a person's time, then handing that person, or a new hire, the parts of the job that actually take judgment.”