It takes more than a cold beer to worry Steve Bee. A report on businesses’ preparedness for auto-enrolment might just do the trick.
Okay, I’ll admit it. I was sitting by the pool drinking another of those cold beers that taste sooooo much better in the Algarve, when the editor’s email pinged into my so-called smart device. What the email said was “How’s the article coming along?”. And it was at that moment that I realised some quick thinking was in order.
It’s Friday morning as I write this, so here I am in the airport lounge, hoping I can hammer 500 words into this dopey ‘smart device’ before our flight home is called. (I forgot all about it again in the chaotic packing frenzy as we wrapped the holiday up.)
But fortunately I’ve got something to write about as I’ve been sitting in the airport here since the crack of dawn (the cheap flights always get the God-awful time slots) reading a report on how payroll companies are struggling with auto-enrolment (something, by the way, that led to another of my wife’s classic comments. This time a reprise of the “Don’t you ever take a day off?” one that seems to be becoming a particular favourite).
What You Don’t Know You Don’t Know
The report is fascinating.
Apparently a survey of 108 firms that have passed their staging dates has thrown up the fact that the 43% of the employers who responded said that their HR/payroll systems were unable to cope with auto-enrolment. The same survey found that 77% of firms that have yet to reach their staging dates think their payroll systems will cope with the auto-enrolment rules. If that hasn’t got “Ooh-err!” written all over it I don’t know what has.
It appears that a secondary market is already springing up, with employers looking to bite the bullet and change payroll providers as a consequence of their own poor experience with auto-enrolment. That’s pretty much what I’ve been predicting for some time now, as many readers of IFA Magazine will know, but it’s happening a lot earlier than even I thought it would.
Now, changing payroll companies is a big step. Most firms have their regular pay-period frenzies geared up around the quirks and nuances of particular payroll systems that might not be ideal – but at least their staff have grown used to them, and they know all the ins and outs that get payslips out on time and money in the bank.
I know what frenzies are like; we all do. Everything else gets put on hold while they rage. For payroll people this happens every month, and for some of them every week. Changing horses in mid-stream is not an easy thing to do.
Hang Onto Your Payroll System
Using a middleware system to take auto-enrolment out of the payroll system makes a lot of sense, and it’s probably a better alternative to switching payroll systems. The report I’ve just read makes that point well. But it also highlights the fact that middleware systems don’t come cheap.
At the risk of repeating myself (I think I made this very point in this very magazine nearly two years ago), the trick is to get middleware out to ordinary firms at a commoditised price before the smaller firms start hitting their staging dates.
I think that will happen. I also think IFAs will be instrumental in making it happen.
I also think my wife just said “I’m getting on the plane” when she went off just now. So, back to the frenzy…