I’m just putting away my breakfast things (Mackerel and beetroot pitta bread. Tried that? Yum) and, naturally, I started thinking about where we go next with automatic enrolment.
Yes, I know, the DWP is reviewing it right now, so what’s the point? Let’s wait and see, right?
Well maybe, if you think that whatever the DWP comes up will really make the difference. It could I suppose, but that’s not what really grabs me. What grabs me is the mindset of the employers and their staff. This is important you know. Our kids and grandkids need us to get this right.
Undoubtedly, numerically, auto-enrolment has been a success so far with in particular, single figure opt-out rates a pleasant surprise. But this is still just the start. Are we in the right place to drive forward to bigger and better things. Sadly, I don't think so.
Perhaps unsurprisingly, the home of auto-enrolment in SME land is largely with accountants and payroll providers. And why not. The pensions advisory profession hasn’t really got behind it for SME’s (richer pickings elsewhere no doubt) so someone had to help them. The trouble is that this has placed company pension schemes in compliance and finance land instead of employee benefit land. This may not matter for now, whilst contribution levels are relatively painless, but it remains to be seen what will happen as contributions rise. I would question whether that’s something that the DWP can influence because it’s all about one thing, something that a multi-coloured monster can’t achieve; Engagement.
I’m seeing and hearing that staff really are taking an interest; ahead of staging, they’re even asking when it’s coming. They don’t know much about it. They probably don’t realise how it important it is. But they’re curious. Their ears are open. And still, employers say that their staff aren’t interested. So how does that happen?
Well, it means elevating pensions to “key engagement tool” level doesn’t it. Taking a seed of interest and turning it into something that reassures and motivates takes more than putting a poster up. It starts with a shifted mindset and progresses with a long-term strategy. It takes a marked shift in how some SME’s view their entire relationship with their staff. So pensions are only a part of it. But an important part. One of the most important ways that an employer can help staff is by making sure they’re prepared for when they stop working. But employers need to make staff see that.
“Look after your staff and they’ll look after your customers. It’s that simple”
I know I’ve peddled that Richard Branson quote before, but it still says it all for me.
So, what I’m getting at is this: to really nail employer engagement, the home of auto-enrolment should be with HR managers and advisers, not accountancy and payroll. So, HR advisers, are you up for the challenge?
Hmm, Heart burn. Maybe the Mackerel and Beetroot combination is not such a hit after all.