7 key ways to navigate the 2025 National Minimum Wage increase

7 key ways to navigate the 2025 National Minimum Wage increase

Protecting margins whilst recruiting the best staff for your healthcare business

April 2025 will see another rise in the National Minimum Wage (NMW) and Employers’ National Insurance (NI) contributions bringing with it an inevitable impact on businesses.

Higher wages are a positive step for workers:

• they ensure fairer pay
• they recognise the invaluable contributions of carers
• they will help attract more workers into the healthcare industry, helping alleviate staff shortages

However, these adjustments also pose financial challenges for employers, particularly in a sector already facing tight margins.

This is where we can help.

The numbers

From 1st April 2025, everyone over 21 will as a minimum receive the ‘National Living Wage’. Anyone under 21 will receive the ‘National Minimum Wage’.

The new rates be:

• National Living Wage (21 and over): Rising by 6.7% from £11.44 to £12.21 per hour.
• 18 to 20-Year-Old Rate: A 16.3% increase from £8.60 to £10.00 per hour.
• 16 to 17-Year-Old and Apprentice Rates: Both increasing 18% from £6.40 to £7.55 per hour.

In addition, from 6th April 2025, employers will see changes to NI contributions:

• Secondary Class 1 NI Rate: Increasing from 13.8% to 15%.
• Secondary Threshold: Lowering from £9,100 to £5,000 per year, meaning NI will be payable on earnings above £5,000.
• Employment Allowance: Rising from £5,000 to £10,500, with more employers eligible due to the removal of the £100,000 threshold.

What this means

These changes will affect the sector in multiple ways:

Rising operational costs

These increases will inevitably drive up staffing costs, which could impact budgets and service provision.

Recruitment and retention

Increased wages may attract new talent and reduce staff shortages, but financial pressures might make it harder to expand teams or offer competitive salaries. Responsibilities may be spread between fewer members of staff.

Challenges for smaller providers

Organisations with tight financial margins, particularly those relying on public sector funding, may struggle to absorb these higher costs.

Adjustments for cost efficiency

Some employers may need to restructure services, find cost efficiencies, or explore alternative funding sources.

How Safehands Recruitment can support employers

Safehands Recruitment, with its bespoke healthcare recruitment service and years of expertise in the sector, is committed to supporting healthcare providers through these changes. Our impartial advice and tailored solutions help employers navigate financial challenges whilst ensuring the highest standards of care.

Here’s how we can assist:

1. Workforce planning & optimisation

We work with healthcare organisations to analyse staffing needs, ensuring workforce levels align with demand. This analysis helps to minimise unnecessary costs and maintain high-quality care.

2. Flexible staffing solutions

Temporary staffing options allow employers to scale their workforce based on demand, so you only spend what you need, when you need it.

3. We handle each process

From onboarding to training to payroll, our team streamlines the hiring and ongoing employment processes. This reduces administrative burdens and helps employers access trained professionals quickly and efficiently.

Paying our workers directly means we manage employer’s NI, pension contributions, sick pay & statutory protections.

4. Compliance & risk management

With complex employment regulations evolving, our compliance team carries out regular audits to ensure we meet our service level agreements and that our staff are fully compliant.

We can provide cost-effective auditing services including legal requirements to healthcare providers, to avoid potential risks or penalties, removing the headache from the employer.

We also prioritise safeguarding, ensuring our staff are trained to meet the diverse needs of various healthcare settings.

5. Strategic financial planning & budgeting

Working closely with healthcare providers, we help plan staffing rotas in advance, offering greater control over costs and allowing care managers to budget effectively. Whether you are booking an advance shift or emergency cover, the cost is the same. And good to note – we can fill an emergency shift on average within 15 minutes.

6. Training & development programmes

Upskilling is a cost-effective way to enhance your existing team and reduce the need for additional hires. We provide training solutions to maximise workforce potential while managing rising employment costs. Our internal trainer delivers regular half-day and day courses to our workers and external teams at various locations.

7. Our benefits package is attractive

By analysing market trends, we offer competitive compensation packages to our workers as standard, at no extra cost to you. These include holiday accrual, paid leave, flexible hours, free training, uniform and Blue Light cards. This ensures we attract and retain top talent.

Preparing for the future

While the April 2025 wage and NI changes bring financial challenges, they also reinforce the importance of a well-supported and fairly compensated workforce. At Safehands Recruitment, we are here to help healthcare providers balance financial sustainability with high-quality care delivery and a happy, motivated team.

If you need guidance on workforce planning, compliance, or cost-effective staffing solutions, get in touch with our expert team today.