Payroll providers are being urged to help their clients through the auto enrolment process as new research from Creative Auto Enrolment reveals that the majority of medium sized businesses are struggling with every aspect of the process.
Just 15% of businesses staging over the next year feel well qualified to handle preparations alone. With many firms assuming that their payroll provider will handle the entire process on their behalf, payroll companies have a vital role to play in helping their clients avoid crippling fines which can hit £2,500 per day.
A quarter of the businesses surveyed (26%) say they have consulted, or plan to consult, their payroll provider on auto enrolment and 23% say that a lack of external support is an obstacle in preparing for auto enrolment.
Businesses need to tick off 33 different tasks to comply with the legislation according to Creative Auto Enrolment, which is working with payroll companies to provide an end-to-end auto enrolment solution. Payroll providers can assist with 12 of these 33 tasks, but this leaves clients to handle the remaining 21 tasks alone and at least 40% of decision makers admit to being in the dark on each and every task[1].
The biggest concern for businesses is the huge ‘responsibility burden’ of choosing a pension provider and plan for their employees’ savings. Two thirds (66%) say that this is one of the tasks they’re most worried about.
However it’s evident that businesses in fact need guidance through the entire auto enrolment process, with more than half (54%) struggling when it comes to the simple task of determining their staging date. Over a quarter (27%) admit that they couldn’t do this without seeking advice, one in 10 (11%) didn’t realise they had to do it and 15% say they don’t even know what a staging date is.
David White, Managing Director of Creative Auto Enrolment, said: “Despite the fact that it has been 18 months since the first businesses staged, it’s clear from these findings that lessons are still not being learned. It is one of the biggest legislative changes that employers have had to deal with for years and they simply cannot do it alone. In fact we are seeing clients that have missed their staging dates because they have assumed that their payroll provider was handling everything for them.”
“We are partnering with payroll providers across the UK, encouraging them to ensure their clients have a full solution in place. Not only will they avoid being in the firing line when their clients get it wrong, it is a great opportunity to add real value and consolidate client relationships.”
[1] Saying they don’t know what it is, didn’t realise they had to do it or could not do it without seeking advice
