Channel advantage in auto-enrolment change

Dave Pattinson says the new pensions legislation represents a still-untapped channel opportunity

Automatic enrolment is meant to be pensions minister Steve Webb's quiet revolution, yet things will not be so quiet for businesses in the coming months. This has implications for the channel.

VARs can play an integral role in helping businesses navigate pension auto-enrolment, and time is of the essence.

Attitudes towards saving for old age are changing. For larger organisations, auto-enrolment opt-out rates have been lower than predicted, and the process has been relatively smooth so far.

However, the impact of auto-enrolment on smaller firms has gone largely unnoticed. How well will the hundreds of thousands of SMBs navigate this change? Larger firms with HR departments and more payroll staff will be better placed and better equipped to handle this legislative shift.

For 720,000 firms, this will be the first time they will have offered a workplace pension scheme.

Vendor Creative Auto Enrolment, proffering its sponsored research by the Centre for Economics and Business Research (Cebr), has claimed that businesses with up to 100 employees could face an average set-up cost of £12,600, rising as the number of staff increases.

On top of this, firms will have to complete 33 administrative tasks, which will take days.

We have found that a third of our customers would not be seeking any expert advice about auto-enrolment – something we find worrying.

Channel companies have often functioned as negotiators, translators, and supporters. VARs are meant to add value.

Partners that can demystify these legislative changes and advise firms on best practices and technologies, putting smaller businesses in control of their auto-enrolment preparation, may do well.

That goes beyond advising on software choice; it requires a new level of support, guidance and education. As well as taking away the headache of added admin, firms need to be shown how to keep the cost of implementing auto-enrolment to a minimum, how to communicate the changes and benefits effectively to their employees, and how best to prepare.

Rather than worrying about admin and payroll, business owners want to focus on actually running their businesses.

With the technology and support that exist today, there should be no reason for SMBs to be lumbered with even more of a burden. Ultimately, software can do all the heavy lifting, integrating payroll and pensions administration, but there remains a clear lack of understanding among SMBs of the regulations, as well as concerns about the administrative load.

What SMBs need most is to make auto-enrolment as simple and pain free as possible. It does not have to be a mammoth task for firms, and the channel stands to gain.

David Pattinson is channel development manager at Sage