If you run a business then sometime soon you’re going to have to face up to the challenges of implementing auto enrolment. It isn’t going to go away.

However, auto enrolment is unlikely to be core to most businesses’ operations, and the temptation is therefore to bury their head in the sand. At least 89 companies are already under investigation by the Pensions Regulator for potential non-compliance.

Jelf has gained some invaluable experience by working with a number of clients on their auto enrolment implementation and have created the following top tips for SME’s

1. Data

The quality of data that employers hold about their employees is generally patchy and this can be a problem because that data is likely to be needed for auto enrolment implementation and communication. The sooner employee and payroll data is assessed, corrected, formatted and tested the better; but many employers underestimate the size of this task.

2. Liaison between HR and Payroll

It is vital that there is clear and open communication between the two and that there are shared responsibilities and expectations about who needs to do what and when. Auto enrolment can add extra days to the payroll run and processes need to be able to cope.

3. Plan

Don’t underestimate the significant amount of time, effort and planning that is required to successfully implement auto enrolment in your business. The following table is a summary of staging dates:

4. Use a qualified and experienced adviser

The Pensions Regulator recommends that businesses appoint advisers who have already been through the process and have practical experience. Advisers, pension scheme providers and the Regulator itself provide a valuable support network for employers.

5. Choose software wisely

Software has been developed to take away the headache of assessing your workforce to see who is eligible to be auto enrolled, work out the contribution levels, issue all the required communications, maintain an audit trail and so on. Payroll providers may hold your data but they don’t necessarily offer this, so you need to source it separately. Some pension scheme providers may provide free software but with restrictions on how it is used. You need to consider whether they will provide support with workforce assessment, software selection, employee engagement, communications, governance, investment choices, project planning, project management etc.

6. Your staging date is not the end

Auto enrolment is ongoing. You need to assess your workforce every time you run the payroll, which is usually weekly or monthly. Employees will join, leave, change hours or earn bonuses on a regular basis, so ongoing assessments will require adequate resources and strong processes.

7. Implement auto enrolment with your workforce; not to your workforce

The objective of auto enrolment is to help ensure individuals save to provide an income for their retirement, and the hope is that they will see it as clearly being in their interests. However, for younger employees retirement is decades away and they may view a further deduction from their take home pay as tantamount to a new form of tax. Implementing an ongoing communications strategy aids staff retention, helps employees appreciate the range of pension and wider employee benefits you provide, and therefore improves your ROI.

In summary, embrace auto enrolment! Be proactive and realistic about the impact on your business, and plan accordingly.

For more information please visit our Auto Enrolment microsite.