A recent survey of employers being asked if they have encountered additional costs in respect of the new automatic enrolment responsibilities has revealed that the potential financial burden incurred could prove to be sizeable. More than 43% said they had faced additional costs with almost a quarter saying they needed additional resources. The expenses incurred by several employers was significant, with upgraded payroll software being the biggest cause of additional expenditure.
Interestingly, all the individual middleware costs identified were all higher than any of the individual payroll software costs. What the survey was unable to show was whether the payroll costs were ‘one off’ to purchase upgraded modules to the payroll software, and how these compare to annual charges by the middleware companies. It is important to note that most middleware systems still require data from a payroll system. However, additional resource costs, especially to prepare for the introduction of auto enrolment, were also significant with one employer reporting that they spent £50,000 on additional resource.
It will be interesting in a year’s time to see the comparison between the one-off costs of upgrading payroll software against the on-going cost of middleware as the survey results this time show much lower costs for payroll software compared to middleware.