I spent yesterday with 62 employers , 1 of whom had staged auto-enrolment (a small employer in the June 2015 trial).
As I listened to questions and talked with my friend at the Regulator who was co-speaker, I tried to focus on how the next three years is going to be for these bosses and what we can do to make it better. Here are the five ideas that came to mind.
- Stop profiteering out of training. The seminar I was had , had 2 no-shows out of 64 acceptances. It was free. The Regulator told me of a series of seminars where no shows have been well over 50% and attendees as low as 7, less than half the numbers tPR need to make a seminar viable. The difference- price. Charging £250 a head to sell your software and present the Regulator (who speaks for free) is profiteering. If software planners are planning another round of chargeable sales pitches, please stop now – you are profiteering, bringing AE into disrepute and tying up training resource that could be used elsewhere.
- Stop sensational, cheap journalism. This article that appeared in one of the FT journals is materially wrong, I have spoken with Steve Brice who was speaking on a panel at which I was also speaking. Journalists sensationalising the challenges of auto-enrolment to create panic should have their knuckles rapped. In this case, the journalist needs to check his sources and their context.
- Benchmark the price for staging and ongoing support; It is high time that those organisations who sit above the commercial organisations, gave some shape to the market. One of the most common questions I’m asked by SMEs is “how much should I be paying. My answer is that staging should cost no more than £500 in external fees and the costs of managing auto-enrolment should be between £1 and £2 per employee per month. I may have these numbers wrong but at least we have a starting point for further discussions.
- Encourage self-service; for every four employers who look for an outsourced solution, there is one who feels it can self-serve auto-enrolment, The four that outsource and probably should keep part of the process in house, saving money. The reason for outsourcing is typically because employers are frightened by the presentation of the rules (usually in association with big fines).Lets’ encourage engagement, education and empowerment, not supine outsourcing.
- Talk up pensions; we all know how easy it is to focus on the apparatus of auto-enrolment, but for the people who have to pay for the apparatus, it is not compliance that is the most important thing, it is their business. Any successful business is going to prize its human resource above all else. Auto-enrolment is about people and their retirement, we need to encourage people to think about the advantages of offering proper pensions to staff (as well as the disadvantages of not setting up and running auto-enrolment profitably).
When I and the Regulator had finished, the one person who had staged auto-enrolment stood up and told the audience that she had been frightened at first, but that she had followed the Regulator’s instructions (taken their 10 steps), chosen her pension with care and used her payroll bureaux’ service to manage things going forward.
I would like to thank that woman for she did more good in a minute than we had done in two hours.
There is a sixth thing I’d like to change with auto-enrolment and that is the tone of the debate. It is time to focus on how to make every employer as good as that woman. There is one word that stands out – we need to give confidence to those who are staging and restore confidence in pensions.