Small Business Confidence Climbs Despite Wage Concerns [WSJ/Vistage June 2026]

While still cautious, small business confidence is on the rise again after hitting a 12-month low in April following the start of the war and the closure of the Strait of Hormuz. The WSJ/Vistage Small Business CEO Confidence Index increased for the second consecutive month, reaching 87.4 in June. Revenue expectations and optimism about profitability both rose.

On paper, it is a good month. Since the survey closed, small business sentiment is likely to be even more optimistic given the recent ceasefire, the reopening of the Strait of Hormuz, and the subsequent drop in oil prices.

However, a more complicated picture has developed. CEOs are not growing the workforce at the same rate as the business, and costs are outpacing what customers will absorb. Small business leaders are responding with a combination of both discipline and adaptation that is reshaping how they expand and grow their teams.

Growth Is Happening. Hiring Is Not.

For the past several months, small business leaders have been more optimistic about their revenue and profit outlook than about the broader economy, and June extends that pattern. More than 6 in 10 (62%) anticipate revenue growth in the year ahead, up from 57% in May, and 48% expect improved profitability, a 5-point gain from last month. Plans for increases in fixed investments rose to 38%, up 5 points from last month, and more significantly, the highest proportion since January 2025.

Workforce expansion remained stable. Less than half (47%) of small business leaders plan to add staff in the next 12 months, unchanged from May. That flatline is not an accident. Nearly 9 in 10 small business leaders (90%) reported increases in input costs over the last quarter. Meanwhile, 72% say their customers are more price sensitive than they were 3 months ago.

Those conditions together describe a margin trap, and they are forcing a deliberate calculation: Wages are rising at a rate that makes every new hire a bigger financial commitment than before.

Shannon Oelkers, owner of Integrity Environmental, LLC in Eagle River, Alaska, describes what the wage side of this equation looks like from inside a small business. “I’ve had to raise wages across the board 3 times since 2020, plus 4% annual COL raises, and even with all that, we’re still on the low end of salary ranges.”

Much like a treadmill that keeps moving faster, small businesses are struggling to keep up with salary expectations. National data from the Bureau of Labor Statistics confirms the dynamic. Total compensation costs for private industry workers rose 3.4% over the year ending March 2026, but adjusted for 4.2% headline inflation, real wage gains came to just 0.1%. Employers are spending more, yet might not be paying at the rates that employees expect or need.

As ITR Economics has shared at various Vistage Executive Summits held around the country, CEOs should plan 4% annual increases over the next 5 years.

What Small Businesses Are Doing About It

As wage pressure intensifies, small business leaders are taking action. Three-quarters of CEOs report that rising compensation costs are affecting their business plans.

Among the small business leaders reporting impacts from rising compensation, clear themes emerge, all aimed at preserving margins.

1. Selective Hiring

The most effective approaches among small businesses share a common thread: Evaluating each hire rather than across-the-board hiring freezes. Lisa Troost, President of Peter Troost Monument Company in Hillside, Illinois, describes the shift in how open roles are evaluated: “We are being very selective about hiring and not immediately backfilling a role that opens up.” Similarly, another CEO shared that “Rising wages and compensation costs are making us more deliberate in hiring. We are still investing in talent, but only where the role clearly supports customer delivery, product development, or revenue growth.”

2. Technology Investments

Deploying AI tools and automation specifically to absorb workload that would otherwise require new hires was a recurring theme in the data; investments that once went toward workforce expansion are increasingly going toward the systems and tools that make the current workforce more productive.

Automation can support very specific operational efficiencies specific to their business. Burt DeMarche, President of Laurelrock Company in Wilton, Connecticut, describes his approach, “We are continuing to accelerate our transition to robotic mowing to reduce crew size requirements. By shifting from 3-person to two-person crews and integrating robotic mowers, we can service a growing number of accounts without increasing headcount. At the same time, we remain committed to retaining our existing team and avoiding layoffs. This investment in robotics enhances our operational efficiency and supports sustainable growth while reducing the need for additional hiring compared to traditional models.”

That distinction matters as businesses like Laurelrock are trying to grow without proportionally increasing their cost base, and technology is giving them a path to do so.

3. Differentiating on Factors Other Than Wages

Troost also shares that in their hiring, they are positioning other employee benefits to new hires. We are stressing other benefits about the position rather than just competing on wages alone,” she shares. That approach, competing on culture, flexibility, and development opportunities rather than matching the highest available salary, is a more deliberate strategy as wage competition makes pure pay-matching unsustainable for many small businesses.

4. Lower-Margin Sources of Talent

Respondents across multiple industries indicate they are adopting a grow your own strategy, which includes promoting from within and cross-training existing staff. Other small businesses are embracing lower-cost talent from outsourcing, supplementing existing employees with offshore or contract talent. Both of these strategies are part of the same cost-management playbook.

The cumulative effect of these adaptations is visible in the individual components of the WSJ/Vistage Small Business Index. Plans to increase fixed investment have grown. Revenue and profitability expectations are at their best levels in over a year. Workforce expansion is flat. That combination tells the story of small business leaders who are figuring out how to grow without adding personnel. The businesses managing this transition most effectively are the ones treating it as a strategic pivot rather than a temporary pause.

June Year-Over-Year Highlights

All but one of the components of the Index improved from May to June, with gains concentrated in business-level expectations rather than broader economic sentiment. Looking at a year-over-year change, all factors are higher than in June 2025; components are listed below in order of positive year-over-year change. While there have been monthly fluctuations over the past 12 months, the year-ago view shows that some elements remain the same.

• Profitability Projections: Profitability expectations climbed, with 48% of small business leaders expecting improved profits in the year ahead, up 5 points from 43% last year. Meanwhile, 18% expect a decline, down from 23% last June.
• Revenue Projections: Nearly two-thirds (62%) of small business leaders anticipate revenue growth in the year ahead, up 7 points from 55% a year ago. Just 12% expect declining revenues, compared to 15% last June.
• Current Economy: Sentiment about current economic conditions compared to a year ago edged upward, with 18% of small business leaders reporting improvement, up from 17% last June. Macro pessimism persists: 48% still report conditions have worsened compared to a year ago, an incremental decline from 51% last June.
• Future Economy: Forward-looking economic sentiment improved slightly, with 27% of small business leaders expecting conditions to improve over the next 12 months, compared to 29% last year. While 30% expect conditions to worsen, this is 6 points lower than 36% last year.
• Fixed Investment Plans: Thirty-eight percent of small business leaders plan to increase fixed investments in the next 12 months, up 4 points from 34% last year, while 15% expect to scale back compared to last year’s 17%.
• Workforce Expansion Plans: Forty-seven percent of small business leaders plan to add staff in the next 12 months, unchanged from May and just a percentage point above 46% last June. Just 11% plan reductions match those from June of last year.

The June 2026 WSJ/Vistage Small Business CEO Confidence Index was calculated from an online survey sent to CEOs and other key leaders who are active U.S. Vistage members. The survey, conducted between June 1-15, 2026, collected data from 626 respondents with annual revenues ranging from $1 million to $20 million. The Index is calculated based on favorable minus unfavorable responses from this set of standard questions, plus 100, anchored to June 2012 = 100.

To explore the full June 2026 WSJ/Vistage Small Business data set, visit our data center or download the infographic.

The July 2026 WSJ/Vistage Small Business CEO Confidence Index will be calculated from responses to a CEO survey, conducted from July 6-13, 2026, gathering input from CEOs and other key leaders who are active members of Vistage.