Key points
• Auto-enrolment will require technology that is capable of supporting an employer’s pre-payroll benefit data management processes.
• The data management processes involved in auto-enrolment will require changes to technology and supporting communications.
Pushing the UK reward function into a more 21st-century approach to administration will enable it to cope with far more than auto-enrolment, says James Markham
Pensions auto-enrolment is the first compulsory, universal, government-defined, continuous, flexible UK employee benefit. To handle auto-enrolment compliantly and cost-effectively will require technology capable of supporting end-to-end, near real-time automation of the employer’s pre-payroll benefit data management processes.
However, the typical UK reward function operates with hidden, sometimes outsourced, semi-manual processes with: multiple hand-offs; semi-automated interfaces between HR, payroll, HM Revenue and Customs and, if present, pension and other benefit providers; monthly or annual data management cycles; and threeto five-day service levels for exchanging data files between parties.
It also operates with, where automated, multiple, unintegrated, technology point solutions focused on post-payroll administration, flex choice and building employee engagement.
Although most benefit administration firms are investing to provide the pre-payroll capability required by employers for auto-enrolment, the risks, costs and timescales involved can be significant.
Solutions are, or will be, available. But effective selection will be critical - getting beneath the demonstrations, screenshots and presentational promises to determine whether a solution truly has the required capability. To date, the UK reward function has not chosen to recognise the difference between engagement-focused, flex choice, post-payroll technology and pre-payroll data-processing and integration technology, and has taken as unavoidable the significant semi-manual work arrangements that arise with the former. This will not be viable for auto-enrolment.
Effective implementation will also be critical. Any project involving end-to-end, near real-time automation of data management will require changes to work organisation beside changes to technology, and supporting communications.
The benefits of moving the UK reward function as quickly as possible towards a more 21st-century approach to reward administration go far beyond simply enabling cost-effective auto-enrolment. It will push reward functions to implement advanced data management technology, which will provide opportunities for greater operational efficiency for other benefits. Also, the use of more integrated technology will enable the capture of a broader range of reward data, allowing more analysis and better reward policy-making.
Finally, more sophisticated data management technology will support enhanced employee experience/screen design, enabling employers to leverage the learning from social technologies such as Facebook to drive more effective employee engagement. Completing this transformation will reap major benefits.
James Markham is managing director at SBC Systems (UK)
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