Planning to hire in 2027? The changes small businesses should prepare for now

Key takeaways:

• One in five small businesses plan to hire in 2027, but rising wage costs mean employers will need to budget carefully.

• New recruitment rules could require salaries in job adverts, while government incentives may provide support for hiring young people and apprentices.

• Growing teams should also consider wider employment costs, from insurance requirements to new support designed for start-ups and scale-ups.

One in five small businesses plan to hire new staff in 2027, according to new MoneySuperMarket research. ¹ But employers planning to grow their teams have several changes to factor into their budgets and recruitment plans for next year.

From higher minimum wages and potential new rules around job adverts to financial support for employing young people, here are some of the key changes businesses should have on their radar.

Budget for higher wages from April 2027

From April 2027, the UK National Living Wage and wages for apprentices will increase.

The National Living Wage for workers aged 21 and over will increase from £12.71 to £13.21 an hour from April 2027. ² For a full-time employee working 37.5 hours a week, that equates to an additional £975 a year in gross pay.

Apprentices will also receive a 31p-an-hour minimum wage increase at the same time, rising from £8 to £8.31 an hour.

Businesses should therefore budget using the new rate where relevant rather than today's wage costs, especially those planning to hire in the new year.

Existing employees may also need to be factored in, particularly where businesses have several workers paid at or close to the National Living Wage.

Higher payroll could have implications beyond salaries too. Wage bills can be one factor insurers consider when calculating Employers’ Liability premiums, so businesses should make sure the information they provide to their insurer remains accurate as their workforce grows.

Get ready to “say what you pay”

Employers could be facing new requirements around how jobs are advertised.

The Government plans to make it a legal requirement for employers to include salary information in job adverts.

CIPD research cited by the Government show that currently 41% of employers always publish salary ranges and just 18% always publish a specific salary. ³

There is no start date yet for this new requirement, but businesses have been encouraged to start publishing pay information voluntarily in preparation for the change.

Alicia Hempsted
Insurance Expert

Employers can use new rules to their advantage

Salary transparency can benefit both employers and employees, and businesses shouldn’t be afraid of greater openness around pay.

While leaving salary information off a job advert may once have been seen as a way to attract a wider pool of applicants, today it risks putting candidates off applying for roles where the pay is unclear.

Setting and clearly communicating a salary range can also give businesses greater certainty when planning recruitment budgets.

Greater transparency around pay can help identify and address pay gaps, while giving existing employees a clearer understanding of how they’re being rewarded.

For businesses planning to recruit in 2027, deciding salary ranges in advance could therefore serve two purposes: preparing for the proposed rules and giving employers a clearer idea of how much additional staff will cost.

Look at support for hiring young people

Businesses considering younger recruits could be eligible for additional support.

The October Budget confirmed funding for the £3,000 Youth Jobs Grant for businesses employing eligible young unemployed people. It also confirmed a £2,000 apprenticeship hiring payment for new young apprentices taken on by non-levy-paying employers, which are typically small and medium-sized businesses in England. ⁴

The Government is also providing £100 million over two years to expand local apprenticeship services and help employers create more apprenticeship opportunities.

For small businesses already considering an entry-level role, it could therefore be worth checking whether an apprenticeship or eligible young recruit could qualify for additional government support before starting the hiring process.

Growing businesses could have more options for attracting talent

The October 2026 Budget also included measures aimed particularly at start-ups and scale-ups.

The Government is expanding tax-advantaged employee share schemes. From 6 April 2027, the Company Share Option Plan (CSOP), which will be renamed EMI2, will allow employees to receive options worth up to £120,000, double the current £60,000 limit. The changes are designed to give growing businesses more flexibility to attract, reward, and retain employees. ⁵

Access to finance is also being expanded, with the British Business Bank receiving a £5 billion increase in financial capacity, including £1.4 billion for equity funds backing high-growth businesses and £450 million for a new venture-debt product for innovative firms.

These measures won't apply to every small business but could be useful for start-ups and scale-ups that need additional funding to grow their workforce or want an alternative way of competing for talent.

Don't forget Employers’ Liability insurance when you hire

Taking on a new employee is a big step for a small business, so businesses planning to recruit in 2027 should start budgeting for the true cost now.

That means considering higher wage rates, alongside the wider costs of employing someone, rather than looking at salary alone.”

There is support available too, particularly for businesses considering younger employees and apprentices, so check what your business could be eligible for before advertising a role.

And don't forget insurance. If you're taking on employees, check whether you need Employers’ Liability cover. If you're expanding an existing team, tell your insurer too, as changes to your workforce and payroll may affect your cover or premium.

Five things to do before hiring in 2027

1. Calculate the true cost of the role:

   Factor in the new National Living Wage where applicable, alongside other employment costs rather than budgeting for salary alone.

2. Set your salary range early:

   Publishing pay isn't yet a legal requirement, but doing it now could help you prepare for the proposed “say what you pay” rules.

3. Check hiring incentives:

   If you're considering younger workers or apprentices, check the eligibility rules for the £3,000 Youth Jobs Grant and £2,000 apprenticeship hiring payment before factoring either into your recruitment budget.

4. Explore growth support:

   Start-ups and scale-ups should check whether schemes such as EMI2 or finance supported through the British Business Bank could help fund growth or make employment packages more attractive.

5. Review your business insurance:

   Make sure you have Employers’ Liability cover in place where legally required and tell your insurer if your employee numbers or wage bill changes.

_Sources

<sup>1. The research was conducted by Censuswide, among a sample of 300 small business owners. The data was collected November 2026.
2. https://www.gov.uk/government/news/lpc-recommendations-take-the-national-living-wage-to-1321
3. https://www.gov.uk/government/news/new-say-what-you-pay-law-to-help-young-people-into-work
4. https://www.gov.uk/government/publications/budget-2026-document/budget-2026-html
5. https://www.gov.uk/government/publications/changes-to-employee-share-schemes-including-company-share-option-plan-and-enterprise-management-incentives/changes-to-employee-share-schemes</sup>