May 19, 2020

Time and cost of auto-enrolment are among the biggest concerns for SMEs in 2016

pensions
auto-enrolment
Jess Shanahan
3 min
Time and cost of auto-enrolment are among the biggest concerns for SMEs in 2016

The new legal requirement to automatically enrol staff in a pension scheme was cited by SME managers in the UK as one of the biggest challenges facing them this year. Other hurdles facing SMEs are finding employees with the appropriate skills and lack of funding.

Out of those who identified a business challenge, one in five considered the time and costs associated with the auto-enrolment pension scheme to have a big impact on them, with respondents even saying they feel bullied into it. Specific comments include: “I really do not know how I’m going to put money in the pot to pay for it.”

Another manager commented: “we already have pensions here but now I’m being forced to give them to my staff by law; they are bullying you into it.”

Jill Barnes, the chief executive of Exemplas, said: “Our detailed research and conversations with managers from a range of UK SMEs shed light on a number of pressing issues facing the sector as we enter 2016. The coming year is likely to prove a challenge for small and medium–sized enterprises in many ways, from the perceived skills shortage among young recruits, to the ability to diversify and enter new markets, and also keep up with ever-changing industry specific regulations.

“The Government’s Comprehensive Spending Review has impacted funding provision for support and, with the closure of the Business Growth Service in particular, SMEs are struggling to access the support we know they need to grow.  Understanding the key business challenges will help policy makers and business support organisations tailor this support to where it’s really needed.

“One of the biggest challenges identified was the impact that the legal requirement for an auto-enrolment pension scheme will have on their already stretched time and finances. In particular, smaller companies we surveyed commented that they simply do not know where the money will come from to fund this scheme.”

Rich Preece, Europe VP and Managing Director at Intuit QuickBooks said: “Nearly two million small businesses could be hit by costs up of to £2000 as auto-enrolment takes hold. With fewer resources, these firms are facing a real test, having to get to grips with the law and battle through paperwork to make themselves compliant with the legislation.

“Our own research revealed that many micro-business owners are unprepared for the major impact that auto-enrolment could have on their organisation, with 40% either not knowing or not thinking it will cost anything to set up. On top of this, 34% admitted they would consider offsetting any financial implications from auto-enrolment and the increased contribution into staff pension pots by capping staff salaries and/or bonuses; with 19% claiming they would have to reduce employee benefits and entertainment as a result.

“Auto-enrolment will affect almost every person across the UK in some way, and so it is worrisome that vulnerable micro-businesses aren’t getting the support they need to ensure they’re not only compliant with their staging date, but also set up for the ongoing impact that workplace pensions will have. It’s important they’re getting the education they need now on the issue and that systems can be put in place to manage the tasks ahead.

“Getting a complete overview of the finances and what’s coming in versus what’s going out will also help. Small firms will be in a much better position to plan ahead for the additional expenses they may incur as a result of auto-enrolment. No-one loves doing the books, but by moving them online and working more closely with an accountant, they’ll be ready for auto-enrolment and more importantly, able to focus on doing what they love for their business."

You can find out more about auto-enrolment here.

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Jun 8, 2021

UK office space slashed as hybrid working looks set to stay

offices
hybridworking
realestate
PwC
Kate Birch
3 min
As more UK firms announce a hybrid way of working, new research suggests a third of businesses will reduce their office footprint by more than 30%

With hybrid predicted to be the working model of the future, and businesses both large and small announcing that WFH will continue for employees into the future, the traditional office space is being re-thought.

Businesses are both questioning how much space they need for a hybrid working future, especially if it means they can potentially save money, and what form that space should take.

UK firms slashing office space

Back as early as February, HSBC – whose real estate footprint currently stretches to around 112 football pitches worldwide – said it would be cutting its post-COVID office space by half globally and by 40% in London over the next few years, as it looks to implementation of a hybrid working model in light of the pandemic.

Lloyds Bank followed suit. Following an internal survey where 77% of employees said they wanted to continue to work for 3+ days a week post-pandemic, the bank announced it was also moving to a hybrid model, and so looking to cut its office space by 20% over the next two years.

In fact, the latest research from consulting firm PwC reveals that a third of organisations surveyed (258 of the UK’s largest companies) believe they will reduce their office footprint by more than 30%.

The findings of PwC’s Occupier Survey indicate there is likely to be a sizeable fall in occupied office space with half of executives surveyed saying that despite taking into account mass vaccinations, employees will continue to work virtually 2-3 days a week.

And companies continue to announce the hybrid working model for their employees. Accountancy firm EY has just announced that its 17,000 employees are moving to a hybrid way of working, WFH for at least two days a week. This follows PwC which in March said workers could stay at home for half the time and KPMG which this month said it would expect employees to only work two days in the office every week.

More collaborative work spaces

However, what’s also clear from PwC’s research is that the role of the office is not going to disappear completely, but instead adapt to a new way of working, with half of all organisations with more than 100 employees saying they have a real estate and workplace strategy that considers the long-term impact of COVID-19.

“We may see an increased demand for flexible space as many businesses operating models may well need that option if holding dead space is to be avoided,” says Angus Johnson, UK Real Estate Leader at PwC UK.

According to the survey, more than three quarters of respondents said they are likely to reconfigure existing office with 43% of financial services firms stating that they are extremely likely to do so as a result of the pandemic.

“It’s also clear that the nature and purpose of office space is going to change. As occupiers seek new, different space to meet their accommodation needs, environmental aspects will be increasingly important. If the real estate sector is to truly succeed as a more dynamic, greener industry it’s imperative that creative thinking comes to the fore.”

And companies are already thinking creatively how they can utilise office space in a hybrid future. So while HSBC is cutting a significant amount of office space, it is not downsizing its prestigious Canary Wharf headquarters, and instead reimagining the space. In April, CEO Noel Quinn announced the firm was embracing an open plan floor, with no designated desks or private offices, and instead using hot-desks in line with the future hybrid working style. “My leadership team and I have moved to a fully open-plan floor of the building in east London with no designated desks,” he said on LinkedIn.

Lloyds also reported it was adapting its office space, so that rather than individual offices, it will have a more collaborative workspace. And just last month, KPMG announced it too was ditching desks and individual offices, and replacing them with meeting rooms and conference halls for a more collaborative workspace.

 

 

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