Twice a year Todd Jackson does what he calls a “paperwork session.” He has all 26 employees gather for half a day, and the company provides lunch.

Recently the session concerned health benefits and 401(k) plans, and Jackson invited his broker to the meeting. The company used to have a 401(k) plan in which employees had to log a year at Jackson Design and Remodeling, San Diego, and then wait for the open enrollment period before they could take advantage of the program. Only 5 of Jackson's 26 employees signed up. So he changed the 401(k) plan. Now employees can enroll 90 days after they begin working for the company, and Jackson Design and Remodeling matches employee input after one year.

“We want our employees to feel like they're taking control of their retirement,” Jackson says. “And our ultimate goal is to keep employees for the longer term.”

But many of his lower-wage workers worry that they can't afford to put money away. During their yearly review Jackson will give them a slightly lower raise, maybe 50 cents an hour, but will put $1 an hour into their 401(k). “This gets guys who don't earn that much to start participating,” he says. “Overall, company morale has benefited because everyone feels involved.”