Agility is crucial for any start-up venture, as it must be able to adapt to changing regulations, market conditions and the behaviour of customers.
Agility was certainly beneficial in helping start-ups when the government unveiled auto-enrolment, which was part of a pension reform plan that required employers to automatically enrol staff members in workplace schemes. Similarly, registered businesses were also required to contribute a minimum of 1% gross pay to their employees pensions, with this figure set to rise to 3% by the end of 2018.
With this in mind, it’s imperative that you set up pension schemes early as part of your start-up, while employees also need to play a pivotal role in ensuring that this is done successfully.
The Importance of Setting up Auto-enrollment
The regulations relating to auto-enrollment are pretty clear, and failing to comply with these can lead to significant financial sanctions. So, while auto-enrolment may be an administrative task by itself, it’s crucial that entrepreneurs play a leading role in enforcing this throughout their business.
The sheer cost of implementing auto-enrolment also makes a compelling argument for tackling this issue as early as possible. After all, a study released at the end of the first quarter of 2016 revealed that it costs start-ups and small businesses around £317 million cumulatively to achieve this objective, with much of this capital required to support back-end development. Such an expensive outlay will need to be factored into your start-up costs, otherwise you’ll be unable to offer auto-enrolment to your employees.
Addressing the Role of Employees – Why They Must Force Employers to Comply
Of course, the cost and time-consuming nature of implementing auto-enrolment may encourage some entrepreneurs to ignore this legislation, irrespective of the potential consequences of non-compliance. In this instance, there’s an onus on employees to understand their rights in the workplace and challenge their managers at all times, so that they highlight the problem and drive change within the business.
Employees are increasingly aware of their rights and pension options in the modern age, from traditional workplace schemes to the type of advanced, self-invested pension plans (SIPPs) offered by firms like Bestinvest. You’ll therefore be expecting to be automatically enrolled into a workplace pension scheme when you start work at a new company, while you’ll also know that the firm should provide contributions of at least 1% gross pay.
If these features are not included as part of your benefits package, you should raise this with recruiters as a matter of urgency. Not only will this help you to safeguard your own interests, but it will also ensure that your prospective employers remain compliant when looking to recruit the top talent.
