The game balance I would like to aim for, in terms of levelling, would be something similar to Gothic 2, if you've ever played it. There is no level-scaling in kenshi, as it goes against my tenets as a game developer and ruins an RPG. So everything and everybody in the whole world is at a fixed level and does not change as your own characters level up. The player must avoid the stronger enemies until he is ready to take them on. This can be done by being careful not to make certain enemies in the first place, and avoiding the most dangerous map areas. Likewise when you are stronger and find things are getting easy, you can always find something more dangerous to do.
For a game like this you need to reconfigure the way you think about it a little, as all games seem to follow the same fundamental conventions and have given players bad habits. Most notably the fact that players are always more powerful than every single enemy, and the player is always made to feel like the world revolves around him.
Imagine you have been put in this situation in real life. Its not recommended for anybody to wander the dangerous desert alone, let alone someone with no skills. You need to join a trader caravan or something where you can travel safely in a group, and it will earn you money too. When you get into fights the other guards will back you up and do most of the work, set your character to focus on defence and he should stay alive. His defence skill will go up rapidly until he can hold his own and start hitting back.
Once you have a little money you can start recruiting some more characters. Use your stronger ones to protect the weaker ones until they can hold their own. Give them first aid when they go down and keep them alive. Be cautious and grow. You don't have to win all the time, if a character looses a fight, he actually gains more experience from it. After all you never forget a lesson if it involves getting stabbed.
Recruiting new characters will be relatively easy, but just increasing your numbers won't solve all your problems. You have to feed and equip all these people, pay for accomodation when they need a safe place to rest and heal. Its all about striking the balance and doing it the way you like. You can nuture a small elite group, or maybe just throw a large group of people into battles and just keep the survivors.
Freedom to the player.