October 2012 saw one of the most radical changes in decades for pension provision by UK employers and for employees – auto-enrolment. Now mid-way through 2014, employers with 250 staff or more are already complying with the new workplace pension legislation – and most would concede achieving the auto-enrolment process has been fraught with challenges.

The spotlight is now shifting to smaller organisations, with those companies employing 50-249 staff now tasked with auto-enrolment. The process will be finalised by April 2015.

In this blog Neil Lagden, Head of Bond Payroll Services, discusses what has been learnt so far during the auto-enrolment process and what is next for those businesses yet to complete the transition.

As with all new initiatives, those implementing auto-enrolment have faced new challenges and an increasingly complex payroll environment. This has mainly been due to procedural changes required throughout the organisation and the introduction of new reporting structures to manage the various tasks associated with the process.

In addition, auto-enrolment has prompted organisations to look closely at the existing HR and payroll solution: will disparate HR and payroll systems create problems in achieving auto-enrolment? Is now the time to consider outsourcing payroll processes? What is the best way to generate the information required by the pension provider? And how can payroll and HR teams work together effectively to meet the new demands?

Auto-enrolment has undeniably been a major deal for employers but by confronting it early, it has been possible to limit potential the disruption. Moreover, what is often lost in the discussion over auto-enrolment is that providing a means for employees to save for their future is a tremendous opportunity, particularly in view of increasing life-expectancy, and the value of this may be repaid in terms of loyalty and reduced staff turnover.

With smaller organisations implementing auto-enrolment between now and 2017 it is critical that they learn from the lessons of their larger counterparts. Offered below are three tips to make the process as smooth as possible for the smaller organisation.

·       Conduct an audit of the workforce to determine everyone who is eligible for enrolment.

·       Plan in advance – the process is undeniably a major deal for employers but by confronting it early, it is possible to limit the disruption it will bring.

·       Communicate – what is often lost in the discussion over auto-enrolment is that the process provides an opportunity for employees to save for their future. Ensuring everyone in the business understands the potential value of a pension is an essential aspect of the auto-enrolment process.