“I’m in!” Business owners share their auto-enrolment reality stories
Startups spoke to two businesses who have gone through auto-enrolment about tackling the process and what it meant for their employees
With the key staging date for small businesses having ALREADY passed on April 1, it really is time for business owners to overcome any aversion they may have to avoid mounting fines.
While time-consuming admin is the last thing any business owner like you needs, get proactive about auto-enrolment and tick it off your list.
The new legislation, which is part of the Workplace Pension Reform, requires every UK business with 30 employees or fewer to automatically enroll workers in a workplace pension scheme if they earn more than £10,000 and are aged between 22 and the state pension age.
Late-running firms face hefty fines for non-compliance – but it doesn’t have to be a chore. To give you an idea of what to expect from auto-enrolment, we spoke to two companies that have been through the process.
Nick Stokes from ethical street food business Gourmet Goat and Tom Jeffrey from fashion e-commerce site Jules B share their experiences of staging and how it affected their businesses.
Is it as bad as it looks from the other side?
Though it can seem like an intimidating and tedious process to tackle from the outside, both Stokes and Jeffrey claim the process was relatively straightforward. Stokes said it was “easy”, explaining that the “initial letter had all the info and then the online process was straightforward”.
Jeffrey from Jules B agrees: “It was daunting at first, but once implemented it was quite easy.”
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What did you find difficult?
Stokes says he hasn’t found the process difficult or time-consuming at all so far, but admits that “the details of who pays and how much is a bit of a minefield” – which payroll software helps to simplify.
For Jeffrey, implementing auto-enrolment has been time-consuming, and the difficulty has been in attributing the scheme “to over 100 staff members”. The more employees you have the more difficult or time consuming it‘s going to be to implement. If you don’t have an internal accounting team, you can get external help and use software to offload some of the work.
Both Stokes and Jeffrey say they used Sage Payroll to help them through the process with minimal hassle. The software has an auto-enrolment section to help make the process as straightforward as possible.
The advantage of using payroll software like this is that it enables you to assess your workforce and automatically enrol the required employees, importing and exporting the necessary pension’s data for specific pension providers.
For each employee it’s then possible to display and run a report on their current status. This includes their eligibility, whether they’ve opted in, the percentage of salary due to be paid each month by the employee and employer, the pension scheme they are enrolled with, and the total amount that will transfer automatically through the payroll run.
It also lets you know when you need to communicate with employees about auto-enrolment and helps you to produce the right correspondence to comply.
How did you inform your employees and how did they respond to the changes?
Auto-enrolment will have major implications for your employees and it is your responsibility to inform and educate them about what those changes mean for them.
While Stokes has yet to inform his employees about auto-enrolment through a formal communication process, Jules B chose to inform its employees internally via email and says the response was “relatively quiet”: “Overall we got good feedback, no mistakes have been made and the pension scheme means that nobody goes without”.
What would be your number one piece of advice for employers who have not staged yet?
HMRC are already fining companies that have missed their staging date, so what advice do Gourmet Goat’s Stokes and Jules B’s Jeffrey have for companies?
Stokes advises: “Set aside some time, stage and then get information on pensions ready and written down as there is a long gap between staging and starting”.
Jules B’s Jeffrey simply states that you should: “Get it sorted as soon as possible as this is a mandatory requirement.”
So there you have it: don’t risk getting fined and start being proactive about auto-enrolment – after all, it’s not as bad as it looks from the other side.
Ready to get started? Find your ideal Auto-Enrolment solution here and get it right every time: http://www.sage.co.uk/lp/payroll