Time and cost of auto-enrolment pension scheme amongst the biggest concerns for SMEs in 2016
Other major business challenges identified by SME managers for this year include skills shortages, lack of access to funding and finding new business.
Managers of UK SMEs have identified the new legal requirement to automatically enrol staff into a qualifying pension scheme as one of the biggest business challenges facing them in 2016.
In total 150 managers of SMEs were asked by national small business support organisation, Exemplas, what the biggest challenges are that they are likely to face in 2016, in the areas of business regulations, employment law, skills, business finance, digitisation, business taxation and business development.
The challenges most frequently raised within the research were: finding employees with appropriate skills, lack of finance/funding and the time and costs of setting up pension schemes for employees, with the latter appearing to be of rising concern.
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 potential for a big impact on them, with respondents even saying they feel bullied into it.
Finding employees with appropriate skills, particularly to fill more junior roles, was also singled out as a major challenge for 2016 by nearly half (45 per cent) of the respondents who were able to identify one.
Other issues facing SMEs in 2016 included:
Lack of access to finance and funding (32 per cent)
Finding new business and entering new markets (32 per cent)
Challenges and costs of employee rights and restrictions (26 per cent)
The cost of training and finding the appropriate trainers (24 per cent)
Keeping up with industry specific regulations (21 per cent)
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.”