The vast majority of HR managers say missing open enrollment has a big impact on employees’ wallets, according to a recent CareerBuilder.com survey.

How big of an impact?

• 34% of HR managers say missing open enrollment costs employees at least $500 a year in out-of-pocket expenses (for things like medical care and school tuition, which could’ve been covered by their employer)
• 20% say it costs employees more than $1,000, and
• 10% say it costs workers more than $2,500.

That’s distressing news when you consider that half of hiring managers say more than 10% of their workforce misses annual open enrollment deadlines.

In addition, 25% of workers admit they don’t pay attention to benefits changes, figuring their benefits will roll over — or because they feel the whole process is too confusing.

Employees don’t realize what they’re missing

Another big reason employees don’t participate: They don’t realize everything their employer is offering.

When asked which benefits employees aren’t taking advantage of, HR managers said:

• Wellness benefits (45%)
• Flexible healthcare spending (43%)
• Tuition Reimbursement (38)
• Banking programs (25%), and
• Discounts on personal entertainment (24%) and technology (22%).

Consider that (a) the EFCA isn’t dead yet, (b) the White House is busy reorganizing the National Labor Relations Board to reflect the administration’s pro-labor stance and (c) labor leaders have set a goal of increasing union membership by 1.5 million a year for the next 15 years.

Those factors should lead to more vigilance about labor organizing.

Labor attorneys from the firm Fisher & Phillips say there are five major mistakes  complacent companies make that lead to union organizing:

1. Favoritism. It’s the No. 1 reason employees cite for joining a union. The term can mean a lot of things, but here’s what it amounts to:  inconsistent disciplinary action. When some employees feel they’ve been hit with discipline they didn’t deserve, while other employees got a break, expect to seen union sign-up cards floating around.

The solution is twofold: (a) clear policies and (b) managers who follow the policies. One without the other will lead to trouble.

2. Ignored complaints. A main union selling point is “giving employees a stronger voice.” Employees feel they need that voice when they perceive that no one is listening to them. The opposite of ignoring complaints: listening to them and acting on them. That doesn’t mean every complaint is valid, of course. Still, you have to give employees the feeling that at least someone is looking into it and taking some action if needed.

3. Lack of respect. Here’s the recipe for giving employees the idea they’re not respected: Disciplining them in front of others, assigning blame before reviewing the facts and  playing favorites. Those traits give employees the feeling that their managers are enemies, not advocates.

4. Lack of concern about safety. Another weak spot that unions probe: “Your employer only cares about making money, even if it puts you in danger.” The employers’ antidote: safety training, appropriate equipment and clear, uncomplicated guidelines and procedures for responding to and reporting workplace accidents. An extra gold star for employers: Willingness to help employees through the complicated workers-comp process.

5. Noncompetitive pay and benefits. Many are aware of the union promise to “put more money in workers’ pockets.” True or not, it attracts workers who feel they’re being shortchanged.

Now, that doesn’t mean opening up the wallet to every employee who complains about pay and benefits. What you can do:

• Participate in wage-benefit surveys where you can and make sure you are competitive in your industry and your location.
• Be prepared to explain why you’re not at the top of the scale, including the tradeoffs of the other nonmonetary advantages of working at your company — flexible schedules and so on — which employees may not always focus on.
• Be honest with your employees. For instance, if business is down, explain that as the reason for flat wages. The first place a union will attack is perceived dishonesty about pay and benefits.

In fact, 51% of employees said they’d accept a lower wage if their work contributes to something “more important or meaningful,” found a recent survey by Kelly Services.

So how can managers at your company make employees stick around, even if Payroll’s not cutting bigger checks?

Give employees more control

People enjoy their jobs more when they feel valued and in command of their own work.

To ensure employees feel this way, make sure their managers allow them to weigh in on important decisions — and give them complete autonomy over certain tasks, as well as the opportunity to take on more challenging assignments.

Keep them in the loop

Giving employees updates on the big picture makes them feel valued and important.

A few ways that work:

• Explain management’s decision-making strategies to employees
• Invite staffers to important meetings, and
• Provide workers with documentation and other proof of the company’s success.

Give them chances to grow

No one wants to believe he or she will be doing the same tasks five years down the road.

If your employees don’t see any opportunities on the horizon, chances are they’ll be updating their resumes before long.

To avoid high turnover, offer:

• education and training opportunities
• career-path advancement
• team participation, and
• cross training.

Three advantages to spending more on health care: Reduced turnover, improved productivity and higher sales. Check out the healthcare strategy this business used to benefit from them all.

For years, Burgerville, a restaurant chain based in Vancouver, WA, offered limited health coverage to hourly employees.

Result: Just 3% of hourly workers were enrolled.

But when an employee survey showed health costs were employees’ No. 1 concern, the company decided to switch up its coverage and pay 90% of healthcare premiums for hourly employees who worked at least 20 hours per week.

Under this new plan, individual hourly workers can enroll in a health-maintenance organization for $15 per month with no deductible. A worker and spouse pay $30 per month, and family plans cost $90.

Result: Burgerville’s healthcare bill skyrocketed from $2.1 million per year to $4.1 million. But its turnover rate dropped to 52% from 128% in one year. And having to replace and train fewer workers led to huge cost savings. Now, 98% of the company’s eligible hourly employees are enrolled in the health plan.

Because employees must work 20 hours to qualify for the plan, they now work harder to qualify for more hours, which are assigned based on performance, Burgerville’s Chief Executive Jeff Harvey told the Wall Street Journal.

Result: Sales rose 11% in one year.

Contribution rates

Many employees need help understanding the advantages of a “pretax benefit,” like an FSA.

Concrete example: Ask them to estimate how much they expect to pay in out-of-pocket medical expenses throughout the year. Then show how much more they would pay with tax. To put it in numbers, $300 placed in an FSA would be roughly equal to $384 worth of taxable income.

Note: Make sure employees are clear on the maximum dollar amount/maximum salary percentage that can be contributed to an FSA.

Eligible expenses

It’s important employees know what expenses their FSAs can be used to reimburse.

In many cases, workers know FSAs reimburse out-of-pocket costs that aren’t otherwise covered, such as copays, deductibles or services like vision and dental care.

But folks may not know certain over-the-counter meds are also eligible for reimbursement.

Combination of benefits

If your company offers additional pretax benefits — such as a 401(k) — encourage employees to contribute to the FSA as well, even if it’s a small contribution.

Reason: With money in multiple pretax accounts, employees reduce their taxable income.

Contribution limits for defined-benefit and defined-contribution plans will not change for 2010.

Limits are adjusted each year using a formula based on inflation.

And because recent inflation has been minimal, these limits will remain:

• $16,500 for 401(k), 403(b) and 457 plans (plus an additional $5,500 for those 50 or older by the end of 2009)
• $11,500 for SIMPLE plans (plus an additional $2,500 for those 50 or older by the end of 2007)
• $5,000 for traditional and ROTH IRAs (plus an additional $1,000 for those 50 or older by the end of 2009)
• $49,000 for defined-contribution KEOGH plans, and
• $195,000 for defined-benefit pension plans.

Not according to recent trends. 401(k) participation over the past year has remained strong despite the fact that 71% of American workers are now living paycheck to paycheck, a new survey by the American Payroll Association has found.

In fact, 82% of workers with access to a 401(k) say they’re still making contributions.

Of those still contributing, 19% have raised their contribution level and 19% have lowered it since Sept., 2008.

Employees happy with their plans

More good news: The majority of employees (54%) are satisfied with their company’s retirement plan, and 61% say they view their employer’s plan as the primary vehicle to save for retirement, according to recent research from Watson Wyatt.

Another 29% admitted they wouldn’t save for retirement without it.

Some other findings from the Watson Wyatt survey:

• More employees (62%) with a defined-benefit (DB) plan are satisfied with their retirement plan than those with only a defined-contribution (DC) plan (51%)
• 46% of employees say they’d be willing to pay a higher amount out of their paycheck to ensure a guaranteed retirement benefit, and
• 52% of employees with a DB plan say their company’s retirement plan is a key reason they continue to work for their employer — only 33% of those with a DC plan say the same.

Heads up: You may soon be required to provide employees with more info about the administrative and management fees that cut into their retirement savings.

The House Education and Labor Committee has approved the 401(k) Fair Disclosure and Pension Security Act.

It would require all employers to fully disclose all retirement plan fees to their workers.

The bill could pass the House very shortly. If it does, employers would have to provide info on four categories of fees:

• administrative
• investment management
• transaction, and
• any other expenses.

The true effect of fees

Currently, the industry median for total 401(k) fees is about 1.5%, according to the Investment Company Institute.

How big an impact would those kinds of fees have on an individual’s savings?

An account with a 1.5% fee with a balance of $20,000, earning 7% a year, would be worth $58,000 after 20 years.

The balance of the same account would be worth $70,000 — or 17% more — if its fees were only .5%.

Other requirements

As it stands now, the legislation requires:

• 401(k) plans to disclose, in a quarterly statement, fees taken from a participant’s account
• plan administrators to offer participants at least one low-cost index fund in order to receive protection against liability for participants’ investment losses, and
• workers to get investment advice based on their needs — not the financial interest of those providing the advice.

With the SSA announcement that there will be no change over the prior year – almost unheard of in recent memory – there’s sure to be plenty of confusion. The higher-ups will want to confirm that they won’t pay more in Social Security taxes next year, while retirees may ask why they’re not getting a cost-of-living increase in their monthly checks. The latter may also have questions about the Obama Administration’s proposal to send those receiving Social Security benefits a one-time $250 check to help stimulate the economy.

Here’s what you might want to tell them:

• Higher-ups – Indeed, those earning more than $106,800 won’t pay more in FICA taxes in 2010. This tax is the combined Social Security tax rate of 6.2% plus the Medicare tax rate of 1.45%. So, the maximum Social Security tax employees making $106,800 or more will pay is $6,621.60 in 2010. Employers must pay an equal share on each worker. You may want to explain to these employees, though, that as always, there’s no limit to the wages subject to the Medicare tax – so all covered wages are still subject to this 1.45% withholding.
• Retirees – This is the first time there will be no cost-of-living increase since 1975, when the agency began adjusting the amounts based on inflation. The Department of Labor announced this week that consumer prices fell 2.1% since the third quarter of 2008. SSA actuaries base the cost-of-living adjustment on the change in consumer prices from the third quarter of one year to the same period the following year. Since prices are falling, retirees actually have more spending power because the agency never decreases benefits. As for the $250 “supplement,” you may want to suggest that retirees not go spending any potential windfall just yet. Right now, it’s just one idea the Administration has suggested to further stimulate the economy.

A few other updates

The wage bases for the following also remain unchanged in 2010:

• Self-employed individuals – $106,800. There’s no limit for the Medicare tax for these workers, either. The self-employment tax rate remains 15.3%, which is the combined Social Security tax rate of 12.4% plus the Medicare rate of 2.9%. The maximum Social Security tax for those self-employed will be $13,243.20.
• Domestic employees – $1,700.
• Election workers – $1,500.

Getting health insurance coverage for themselves and their families.

In fact, health insurance currently trumps all worker concerns except “generating current income,” according to the 2009 National Consumer Survey on Personal Finance released by the Certified Financial Planner Board of Standards.

Here’s what employees are concerned about today:

• Generating current income (59%)
• Providing health insurance coverage (55%)
• Managing or reducing debt (53%)
• Building a retirement fund (51%)
• Creating an emergency fund (47%)

Education efforts a success

While obtaining benefits like health insurance and 401(k) contributions are big concerns, only 23% of workers are worried about managing these benefits.

So employers’ efforts to educate workers about their benefits appear to be paying off.