Fittingly for the year when a huge number of UK business will have to turn their attention to signing up their staff into pension schemes, the beginning of 2014 has seen the HR and benefits media awash with advice on how to plan for auto-enrolment.
Judging from our latest research into benefits trends which showed auto-enrolment as the leading issue driving benefits strategy for the twelve months ahead, there will be a ready audience for all of this who will be keen to learn from the experiences and insight of the larger employers who started the process last year.
But while it is clear that these employers are largely ready to embrace the challenge of auto-enrolment, our research also found that very few are looking at how it can be used to engage employees more widely – and actively – in maximising the benefits on offer to them.
This is a shame because it seems to me this landmark opportunity when employees and employers simply have no option to talk about pensions is the perfect option to reboot the way we think and talk about the other elements of the benefits mix.
One reason why I think this is particularly important is because of the impact of the costs of auto-enrolment on business and employee.
For employers, both the process of auto-enrolment and the costs associated with the any additional pension contributions will have an impact on budgets elsewhere. If I was a finance director, any parts of the benefits mix which weren’t delivering a great contribution would be the first place I would be looking for budget savings.
For employees, there is also a cost associated with auto-enrolment. Shrinking take home pay and the cost of living are major issues for employees so we need think about how we can help offset this.
That means there is a very good reason for employers to link pensions with the rest of the benefits on offer and talk about areas where money can be saved through salary sacrifice, better use of health insurance or cash plans and driving use of benefits like employee savings and wider voluntary benefits.
I recognise the challenge of rolling out auto-enrolment will be a substantial challenge in its own right with unexpected complications. But I also think that in their planning, employers should strategically think about how pensions sits in the benefits mix and how we can use auto-enrolment to get more out of the money we are already spending.
Andy Philpott is sales and marketing director at Edenred – for more comment, insight and whitepapers visit www.edenred.co.uk/ehub
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