What we think

The 2026 April Budget has landed.

And while the rise in the National Living Wage to £26,436.80 for a full-time role is a positive step for entry-level talent, it’s creating a very different conversation for businesses.

Because this is not just about pay increases.
It is about pressure across your entire hiring strategy.

2026 April Budget & the ripple effect

When wages go up, so does everything else.

• Entry level salaries increase
• Mid-level employees expect adjustments
• Pay gaps between roles start to shrink
• Internal equity becomes harder to manage

At the same time, inflation continues to push operational costs up.

According to CIPD, 72% of employers expect these changes to increase employment costs.

So the challenge is not just hiring.
It is sustaining a workforce model that still works commercially.

A market caught between caution and growth

Right now, we are seeing two clear behaviours in the market.

Some businesses are pulling back.
Hiring freezes. Delayed decisions. Reduced headcount plans.

Others are doing the opposite.
They are continuing to invest, but with far more precision.

In the last six weeks alone, despite widespread caution, we delivered one of our strongest months in over two decades. This included placing a National Account Manager at a six-figure salary for the first time in our history.

Candidate expectations are shifting fast

This is where many businesses are getting caught out.

Candidates are not just reacting to salary increases at the lower end.
They are reassessing their overall value.

We are seeing:

• Higher salary expectations across mid and senior roles
• Greater scrutiny on benefits and flexibility
• More willingness to move for the “right” opportunity

If your offering has not evolved, you will feel it.
Either through slower hiring or losing candidates late in the process.

Why hiring pauses alone won’t solve it

It is tempting to slow things down, especially with the 2026 April Budget upon us.

But pressing pause does not remove the problem.
It often just delays it.

As Director Stewart Wilson puts it:

“The rise in the National Living Wage is the right thing socially, but it presents a very real challenge commercially. Businesses are being squeezed from multiple directions with higher wage floors, persistent inflation and growing candidate expectations. Many will need to rethink role design, pay structures and productivity rather than relying on hiring pauses alone.”

It’s no longer just about hiring fewer people. It’s about hiring smarter.

What businesses should be focusing on now

The companies navigating this well are doing a few things differently:

1. Rethinking role design
Do you have the right structure, or are you over or under resourced in key areas?

2. Reviewing salary frameworks
Are your pay bands still competitive and aligned internally?

3. Prioritising critical hires
Not every role carries the same weight. Focus on impact, not volume.

4. Improving hiring efficiency
Long processes are costing you talent. Speed matters more than ever.

5. Strengthening retention
Replacing people is now more expensive than keeping them.

The bottom line

Costs are rising.
Expectations are rising.
And the market is becoming less predictable.

But this is not a stop sign.
It is a signal to adapt.

Need support navigating the market?

If you are reviewing your hiring plans or feeling the impact of these changes, get in touch.