Staging for small and micro employers is set to ramp up over the next few years. More than 45,000 are due to enrol their workers onto a workplace pension scheme in 2015, rising to over half a million next year. So how prepared are they, asks Paul Budgen.
Ninety-one per cent of small employers and 85% of micros are aware of auto enrolment. Dig a little deeper though and it becomes clear that while it’s on their radar, less than a fifth fully understand what it means for their business.
Why might this be? Before this year, the majority of employers that auto enrolled their workers would have had the capacity to implement it without eating into time spent doing day to day activities. The next wave of employers though, will be unlike any that have come before. This will be down to a number of factors such as the experience they have with pensions and the time they can dedicate to it while running a business.
Where do accountants fit into all of this?
Evidence shows that 90% of accountants’ employer clients hire less than 50 workers. As thousands of small and micro employers fit into this category, their accountant could well be their first port of call if they want help with auto enrolment. And our research shows that many will. Almost three quarters (74%) of small and micro employers will turn to an intermediary for support. Of those, a majority (59%) indicate they will turn to an accountant for help, rising to 70% for employers with one to four workers.
Judging from these statistics, this could amount to more than 26,000 employers this year, and more than 295,000 in 2016. Employers who could well be knocking on their accountant’s door so the commercial opportunity is significant.
What can accountants do?
Of the reasons why employers may look to intermediaries for support, two frontrunners emerge; compliance and ongoing administration.
Having a proposition ready could be key for accountants. With the levels of small and micro employers we’re going to see staging, it wouldn’t be a surprise if an accountant gets multiple clients ringing up at the same time asking ‘what do I need to do to auto enrol my workers?’
If accountants have no response they could miss out, from both a client retention and acquisition perspective. Developing a proposition for auto enrolment services may seem daunting but there is help available. Our online hub, NEST Connect, allows accountants to manage all or some of the auto enrolment process, depending on their level of need, for multiple clients. This means that they can manage everything from one place saving hassle, time and cost.
So the next few years could be busy for accountants. The question is, will they be ready?
Paul Budgen is the head of business development at NEST.
AccountingWEB has launched the No-one gets left behind campaign to alert as many accountants as possible to the obligations implied by auto enrolment. Read our simple eight-point statement which sets out the auto enrolment facts you need to know.
