Increasing number of employers feel administrative impact of automatic enrolment

23 January 2015

76% of employers are now noticing an administrative burden from automatic enrolment, an increase of 7% from September 2014.

According to recent research from Close Brothers Asset Management over three quarters (76%) of businesses are noticing an administrative impact as a result of the ongoing process, an increase of 7% compared to September 2014. Additionally, 7% of employers have now noted a significant impact, stating that staff are spending a day or more per month dealing with the checks and requirements.

The number of employers considering changing their auto enrolment process system is increasing as a result. Close Brothers Asset Management’s latest Business Barometer survey, which questioned over 400 employers across the UK, found that the number seeking to review their processing system has risen to 45%, up from 43% in September. Of these, 32% plan to review their systems within the next year. Additionally, a further 5% would review their system if they changed payroll provider.

Worryingly, employers’ confidence that they are meeting their Employer Duty regarding auto enrolment is falling. In September, 36% were confident they complied fully and had robust systems in place. This has fallen to 34%. Similarly, 46% now believe they are adequately dealing with requirements, down from 48%. In contrast, 17% of employers now believe there are areas to improve upon, compared to 14% in September.

On a regional level, employers in Northern Ireland have felt the administrative burden of auto enrolment most keenly, with 83% noting the impact. By contrast, employers in East Anglia have noticed the additional burden the least (61%).

Maxine McIntyre, Head of Corporate Proposition at Close Brothers Asset Management said:

“Perceptions of automatic enrolment are clearly shifting as employers begin to come to terms with the ongoing work involved in the process, with many finding that there is yet more to be done to be as efficient as possible. While the majority of those who have staged are still confident they have met requirements, there is growing concern more can be done and needs to be done to meet and exceed their Employer Duty.

“In the long-term, auto enrolment will bring with it more business benefits than complications, once the initial administrative bridge has been crossed, and seeking the right support now will help ease initial difficulties.”