A recent research survey conducted by an accountancy firm has shown worrying figures regarding auto-enrolment and small and medium enterprises (SMEs). The research revealed that 67% of SMEs did not know when their auto-enrolment staging date was. In addition, 49% of SMEs admitted having little or no understanding of the changes required for auto-enrolment.
From 1 October 2012, employers have been required to enrol staff in a workplace pension plan before their given staging date. This date is determined by the number of employees within the PAYE scheme of the employer as at 1 April 2012. Smaller businesses have the benefit of later staging dates since the changes needed will have a greater impact and can take up considerable time to establish.
Despite this, SMEs seem to be trailing behind with 35% saying they do not know how to begin to prepare and 42% knowing what needs to be done but failing to take any steps at this stage.
Since auto-enrolment was introduced in October 2012, employers have been in preparation to enrol staff in a workplace pension plan before their given staging date. Employers of 250 staff or more were given staging dates between 1 October 2012 and February 2014, but employers with fewer employees have later staging dates in light of the effect auto-enrolment will have on their businesses. For employers with less than 50 employees as at 1 April 2012, the staging dates are between 1 June 2015 and 1 April 2017. Further guidance on staging dates has been produced by the Pensions Regulator here.
Auto-enrolment can often take between 12-18 months to set up, requiring careful thought as to which plan is best for the employer and how to budget the cost of pension contributions accordingly, therefore SMEs need to start their preparation now.
Other findings suggest a lack of awareness by SMEs in other areas. A survey conducted by YouGov last year found that 46% of SMEs said a lack of knowledge prevented them from adopted cloud based services within their business, whilst a study by the Nottingham Business School showed the shortage of graduates working for SMEs was due to a lack of knowledge about graduates by SMEs, some of which were unaware of what different qualifications actually amount to.
These statistics suggest that SMEs may need to work harder to stay abreast of current developments affecting their business.
For further information on the issues raised in this article, please contact a member of the Spencer Wyatt team on 020 7925 8080 or by email at firstname.lastname@example.org.