Small employers are not necessarily pension experts. They don’t tend to have big HR departments to deal with employee benefits or big payroll departments to handle the admin. Understandably this led some commentators to predict that they would find dealing with auto-enrolment simply too difficult. So the findings from this group of small employers may come as a surprise: we’ve found that they’re handling the process pretty well.
There are three key observations that suggest they’re defying expectations and are really getting to grips with auto enrolment:
Setting up and making payments is simpler
Smaller employers tend to have simpler worker set-up and payment processes than larger employers. As a result they’re more likely to be paying contributions at the same rate and frequency for all their workers and from a single bank account.
Smaller employers are less likely to use their waiting period
Smaller employers are less likely to use their waiting period, compared to their larger counterparts. Almost half (44 per cent) of the larger employers enrolled their first workers in the three month period after their staging month, indicating that many were using waiting periods to postpone their duties. This reduced to 29 per cent for small and 26 per cent for micro employers, indicating that they’re getting on with auto enrolment without delay.
They need less assistance from their pension provider
Small and micro employers are able to set up and use Nest with less need to call us than the employers that staged in the summer of 2014. Looking ahead, 72 per cent say they expect to rarely or never call Nest in the future, with most expecting the on-going management of auto enrolment to be very easy and not time-consuming.
These findings confirm what we’ve been preparing for from day one. Allowing small employers to set themselves up online, with minimal fuss, was always going to be a key component of success.
It’s really important to us to understand our customers and learn from their experiences and their feedback. We’ll keep observing and learning as the year progresses and we’ll continue to share our findings as we go along.