National minimum wage (NMW) changes are leading almost a third of UK businesses to reduce entry level roles with half looking to recruit experienced hires instead, RSM UK Workforce survey shows.

As changes to the National Minimum Wage (NMW) are introduced from April 2026, bringing the younger age band closer to the main National Minimum Wage rate, research from RSM UK has found 50% of employers will recruit more experienced hires as a result, while 29% plan to reduce the number of entry level roles. The findings suggest young people may find it even harder in future to find a job.

Chris Robson, Employment Tax Partner and Fair Pay Lead at RSM UK said: “With around one in eight young people aged 18-24 not currently in education, employment or training the results paint a worrying picture, suggesting the job market is about to get even tougher for those trying to find their first step on the career ladder. Future plans to bring in one standardised NMW rate could have unintended consequences, becoming a further disincentive for employers to recruit younger inexperienced staff.”

RSM UK’s findings also suggested employers are likely to make changes to existing staff work patterns in response to the NMW changes. Around a third (31%) said they would limit staff overtime, while almost a quarter (23%) said they would make reductions to their workforce, and over a fifth (22%) said they would reduce the number of hours their employees work.

The findings come as nearly 400 companies, including some household names, have been named in the press recently for underpaying their staff. These companies now face penalties totalling £7.3m for failing to pay staff the NMW.

From 7 April this year, the new Fair Work Agency will have powers to issue employers with 200% penalties for NMW underpayments. It will also start holding employers to account on other previously un-enforced employment rights such as holiday and sick pay. In addition, the Agency will be able to conduct on-site investigations and start legal proceedings on an employee’s behalf. Despite the new increased enforcement powers, only 16% of employers said the introduction of the Fair Work Agency was a concern for them.

Chris Robson continued: “Given the impending Fair Work Agency powers, holiday pay compliance will now present an increased risk and needs to be viewed through a similar lens as NMW compliance. Holiday pay has gone under the radar with little enforcement in the past, and therefore less attention from payroll system providers, and those writing policies and contracts.

“The goal posts have now moved and non-compliance now brings greater reputational and financial risk so businesses need to ensure policy and processes are robust.”

^{*Research was conducted by 3Gem on behalf of RSM UK. Data was collected between 9 and 18 March from 400 UK businesses ranging between £50m-over £500m turnover. 3Gem is a global insights business, powered by a proprietary panel of more than 10 million people representing voices across 55 countries.}

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