How Much to Pay Your Church Leaders: Pt 3

Welcome back to our mini-series about how to pay your pastors and staff. This series has been very popular and I’m excited to know that (1) people are actually reading these newsletters and (2) that you have found this helpful. I believe that pastors are chronically underpaid, and maybe never more so than now, considering the way the economy has changed and pastoral salaries have not.

Last week, I gave you a basic rule for establishing staff salaries. Let’s recap briefly. 

First, you have to build a profile of the kind of staff member that you want in a particular position. This is true no matter if you are hiring someone new or reviewing the salaries of existing staff. When you are reviewing, don’t start with who you currently have, build a profile for who you’d want. You can adjust to what you have later (if you want to keep that person) but if you start with what you want, you have a better chance of getting that kind of person in the future. This should be a robust demographic, educational, and experiential description of the ideal team member. For more details, go back to my email two weeks ago.

Second, sketch out the lifestyle that you would want your staff member to have. I know this is a unique approach, but I think it’s the best one. National averages and survey data just pull from too broad of a data set to be really helpful. Your context has a very specific cost to it and it’s easy enough to figure out and visualize it. So if you are trying to hire a Lead Pastor or evaluate the salary for yourself, start by describing an expected lifestyle. Sample questions include: Will they own a home or rent? Will their wife have to work? Do you want them to have their kids in public school? Honestly, those three questions will dictate a great deal of the lifestyle picture. But there are dozens more you could ask.

Then, from there, figure out how much that lifestyle would cost in today’s dollars. If you are hiring someone new, assume they will have to move to your city or town and calculate how much it would cost to do so. Housing, utilities, groceries, gas, tuition, and everything else are much more expensive today than they were ten years ago, so you can’t pay ten years' salaries and expect someone to be able to afford to live. This is why a new hire can end up needing to make more than your current staff makes. Likely much of your staff have lived in your city or town for 15 years and have a 2.5% interest rate on a much cheaper house. Those days are gone and that has to be reflected in your salaries.

If you are assessing current staff salaries, I think it would be wise to start with what a new person would have to make - I’ll tell you why in a minute. You are likely getting a deal on your current staff and while that is great for now, it will catch up with you. It’s like in sports when a guy outplays his contract, you can get a year or two of overproduction before you eventually have to renegotiate or deal with a holdout. It’s not wildly different in church staffing. (And by the way, that's the closest any of us will come to being compared to professional athletes.)

Now, that process will give you the baseline you need to assess or establish a salary. But we all know that all situations are unique and there will likely be some extenuating circumstances to consider when all is said and done. Here is one nuance to consider.

REPLACEMENT VALUE

Replacement value is often used as a way to establish a salary, but it requires fairly significant industry knowledge that most of you don’t have at your fingertips. That doesn’t mean you shouldn’t consider it though, and it’s one way that Context Staffing can be useful to you and your church. The reason I bring it up here is that - like it or not - church staffing is a staffing market just like any other market. This means that the scarcity or availability of a particular position ebbs and flows, and with it, the cost of locking down a quality candidate. Right now, young, experienced, quality Worship Pastors are by far the most difficult thing to find nationwide. This transcends theological tribe or denomination, it’s simply very very difficult to find those guys right now (and I don’t think it’s going to change any time soon). 

Because of this, you should expect to pay a premium for a quality Worship Pastor. They will likely be your second highest-paid employee, or at least very similarly paid as an Executive Pastor. You may balk at this for whatever reason (what do they even do??), but if you do, you will not get the guy you want. In most cases, you should expect to pay about 80% of an appropriately paid Lead Pastor. This figure is true for an XP as well. In fact, 20% dips are pretty much standard for every drop in level from LP to XP/WP to Directors to administrators.

So for easy math, if your LP makes $100k, the XP/WP should expect $80k, Groups/Youth/Kids directors $65k and admin $45-50K. Those are ballpark figures of course but if you are way off, you will struggle to keep these roles consistently full.

One other reason to consider replacement value is that it’s likely you will have to replace these people someday and if you aren’t paying market rates, it will blow up your budget. Think about it, if you are paying your current worship guy $60k because he’s been with you for a long time and his wife is a doctor or something but then he leaves and you have to go into the broader market for a guy, now you have to not only find a great replacement but you also have to find an extra $20k in your budget, which is not an easy task for most churches.

I have another consideration I want to give you but this ran long so I’m going to save it for next week. This should get you going though, and for those of you who are underpaid, should be enough leverage to talk to your elders about some changes.

I am passionate about this topic because I have seen too many pastors living on food stamps and barely getting by, and it crushes them, especially their wives. We can’t effectively minister if we are constantly worried about money, so if you find yourself in a role where your elders don’t care about this, you need to start looking for something new.

Quickly, let me give you a look at where this series is headed. I will give you one more nuance to think about next week and start to transition into how to get this done.

Most of you don’t have the room in your budgets to quickly make the adjustments you need to make, but I want to show you how you can do it over a realistic timeline. I’m going to give you three pieces of advice for how to get your church back into alignment with the current market and stay there.

Until next week!