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Auto Enrolment: Process inhouse or outsource?

7th Mar 2016
Marketing Manager BrightPay
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The Pensions Regulator recommends that employers choose software which is specifically tailored to automatic enrolment (AE). It is important to check with your payroll software provider to establish how your payroll handles auto enrolment and you should test it well ahead of your staging date, to make sure it works. This factor will help you decide whether or not you would like to outsource your automatic enrolment duties or process them in-house.

Many payroll software solutions will allow you to streamline the Auto Enrolment processes, saving you time and reducing your workload. The question is which is better - to process auto enrolment in-house or outsource it to a payroll professional such as an accountant, bookkeeper or payroll bureau?

Auto Enrolment: Process In-House or Outsource

It is important that you weigh up the advantages and disadvantages of both. When considering the in-house option, you will need to ask yourself some key questions.

  1. Do you have the time or staff resources to process the employer duties?

  2. Does your current  software have the capabilities required to deal with AE?

  3. Will there be an extra cost for auto enrolment software?

  4. Will it be more efficient to outsource to a payroll bureau or accountant?

Processing In-House

By processing AE in-house, it means you can keep control of the process within the company, and not have to give information to an external source. Processing in-house will also alleviates the costs of outsourcing to an accountant or payroll bureau.

However, with processing in house comes a number of disadvantages. Do you have the software resources or will you need to invest in keeping the process in-house?

It can be very costly and time consuming to research the different software solutions available to choose from, not to mention the high additional costs charged by many software providers. If your payroll software cannot cater for the requirements of AE then they will be additional work and costs involved for your business.

You also need to make sure you have the staff resources. Due to the number of additional tasks that come with AE, there is an increased workload and time required that you need to consider. However, good payroll tools should automate the administrative employer duties for you making it easier.

Finally, you may not have the experience and expertise required for managing it in-house. AE is very complex and researching all the rules and regulations is very time consuming. Because of the lack of experience, there may also a higher risk of non-compliance.

Outsourcing

When we look at outsourcing Auto Enrolment to an accountant or payroll bureau, the advantages and disadvantages are reversed.

The auto enrolment process will be managed by a professional with experience and know how, which reduces the risk of non-compliance. It also means that you and your business have a reduced workload, and do not need to spend time and money investing in both software and staff resources.

However, you do lose control of the process and employee information to an external source. There will also be a fee to pay for outsourcing auto enrolment to a payroll professional.

Processing In-House v's Outsourcing

You need to analyse both the advantage and disadvantages of managing payroll in-house and outsourcing it to a professional.

You need to decide which option will benefit your company the most. Whether you are processing auto enrolment in-house or outsourcing to a professional, make sure that suitable payroll software is being used.

Join BrightPay for Auto Enrolment Training for Employers where we will be joined by John Hale from NEST. More information and full agenda is available here.

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Written by Karen Bennett | BrightPay payroll & auto enrolment software

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