David Pattinson, Channel Development Manager for Sage UK and Ireland’s Small & Medium Business Division, says resellers have an opportunity with auto enrolment workplace pension schemes.
Attitudes towards saving for our future are changing. For larger organisations auto enrolment opt-out rates have been better than predicted, and the process has been relatively smooth so far. Ultimately, the success of Pensions Minister Steve Webb’s flagship policy needs to be measured against how well the hundreds of thousands of small and medium enterprises (SMEs) yet to stage, are able to navigate this change.
Larger firms, with bigger HR departments and more staff running payroll, are better placed and better equipped to implement the changes that come with such a fundamental legislative shift. Yet, for a smaller business, the sight of auto enrolment on the horizon presents an administrative headache.
For 720,000 firms this will be the first time they will have offered a workplace pension scheme – and this move into unchartered territory should not be taken lightly.
Sage’s omnibus survey which spoke to 573 business owners and decision makers in the UK, found the top three fears for business owners implementing auto enrolment to be impact upon cash-flow (30 per cent), a lack of understanding over regulations (12 per cent) and the admin associated with updating payroll processes (9 per cent).
Smaller businesses who don’t have the same staffing resource as larger firms are having to overcome the same tricky legislative hurdle, with the procedural and administration challenges that come with it, or they will have to count the cost of non-compliance. It’s worrying then that nearly a third of our customers would not be seeking any expert advice around auto enrolment.
The role of the IT channel has always been one of a negotiator, a translator, a supporter - the very definition of a ‘VAR’ delineates adding value. So as thousands of small and medium businesses grapple with the introduction of auto enrolment, the channel has the opportunity to come into its own. Partners that can demystify these legislative changes and advise firms on best practices and technologies that can put small businesses in control of their auto enrolment preparation, will ultimately win out.
That goes beyond advising on what software solutions to implement. Instead it requires a new level of support, guidance and education. As well as taking away the headache of added admin, firms need to be educated on how to keep the cost of implementing auto enrolment to a minimum, how to communicate it effectively to their employees and how to best prepare.
Yet with a clear lack of understanding amongst SMBs over the regulations and concerns over the administrative load that comes with auto enrolment, what small and medium sized firms need most is to be guided on the auto enrolment journey to make it as simple and pain free as possible.
About the author
David Pattinson is Channel Development Manager for Sage UK and Ireland’s Small & Medium Business Division.