Some employers consider auto enrolment to be a complicated nuisance, or an unfair “tax” at a time when many businesses are struggling to cope. However, we are seeing an ever increasing and little reported trend where failing to get your auto enrolment solution resolved could cost you new and existing clients.
There is an often quoted statistic that it is five times more expensive to win new business than to retain it. You would have done a lot of hard work and got yourself into the position of being able to tender for a new client. So when the pre-qualification questionnaire (PQQ), requests for proposal (RFP) or invitation to tender (ITT) arrives and it asks the question, “Could you tell us what you have done to meet your automatic enrolment duties?” how do you answer the question?
Recent evidence from many of our clients suggests that this sort of question is becoming the norm for sectors such as recruitment, contract cleaning and construction, to name but a few. If you do not know how you are going to meet your employer duties it is increasingly likely that you will fail to get through the first hurdle.
So what can you do to make sure you have the edge over your competitors?
STEP 1– Know when the regulations apply to you, otherwise known as your staging date. Armed with your PAYE reference your staging date can easily be obtained from The Pension Regulator website.
STEP 2 – Consider appointing a professional adviser. If you have not reached your staging date your adviser should be able to provide you with a letter of engagement. This can be used to provide evidence in your tender response that you are aware of what your obligations are, when they apply to your business and what you are doing to comply.
STEP 3 – If you are intending to comply with the regulations by doing the bare minimum consider how this will look to prospective clients. It could be worth looking to introduce a benefits package that is over and above the minimum requirements. This will show that you care about how your employees are treated.
STEP 4 – There are a multitude of auto-enrolment pension schemes available in the market. Make sure you choose one that is appropriate for your workforce.
STEP 5 – Make sure you are compliant. The Pension Regulator has the ability to impose fines on businesses that do not comply with the regulations. The first few fixed penalty notices have already been issued. It goes without saying that prospective clients will take a dim view if you have received a penalty for non-compliance.
Once you have completed all of the necessary steps and you are able to articulate your employee benefits package, you’ll have a much better chance of turning that prospective client into an actual client!
Independent Financial Consultant
Auto Enrolment Specialist
Sterling & Law Group plc