How Much to Pay Your Church Leaders: Pt 5

For the last four weeks, I have given you a framework for deciding how much to pay the leaders in your church, including yourself. I’ll recap briefly in a moment but before I do, I want you to know where we’re going today and for the next couple of weeks. My argument has been that you are likely not paying yourself or those around you enough. This is probably good news for some of you but even the good news comes with some problems. Namely, how do you afford to give yourself and those around you the raises you deserve? That’s the question I am going to answer for the next 3-4 weeks. Before I jump into the first idea, let’s recap.

I gave you a three-step process for deciding how much to pay your staff. 

First, build a profile of the kind of staff member that you want in a particular position. This is true whether 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. This should be a robust demographic, educational, and experiential description of the ideal team member.

Second, describe 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. Your context has a very specific cost to it and it’s easy enough to visualize it. 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.

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. Everything is much more expensive today than it was ten years ago, so you can’t pay salaries ten years ago 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.

If you want more detail than that, go back to previous emails or the resource page on our website.

It’s likely that this process will result in a salary that is higher than you expected. So, how do you pull this off?

First, you need to make sure that your budget makes sense. In general, salaries should make up about 50% of your overall budget. Don’t get locked into that number because context matters. If you have a paid off building or if you live in an expensive city, your staff costs are going to be higher, but they shouldn’t be 20% higher. For this exercise, take 50% of your projected income and allocate it for salaries. 

Start with the LP and allocate a competitive salary that will prevent him from being enticed to look elsewhere for purely financial reasons. Then go to the next most important role in your church (likely worship or XP depending on your size) and give them a similarly competitive salary, and so on until you are out of money. That may not take long.

When you have run out of money, you will likely find that you don't have enough staff members to run your church. This is why churches are always tempted to pay bad salaries. They run into this problem and the only solution they can come up with is to pay more people less money. This is the wrong solution. This solution assures that you will get subpar people who suffer financially until they burn out. Not a great solution. 

Instead, here are some alternative solutions that will have much better outcomes. We’ll hit the first one this week.

First, pay to get the best people you can. Really good leaders are a lot more valuable than mediocre ones. It's not 10% more, it's like 200%. It's why every NBA team has 1-2 max contracts and then a bunch of white dudes making minimum salaries. Superstars have an outsized impact on an organization.

Before you get all preachy about superstar pastors, that's not what I'm saying. What I am saying is that I would rather pay $100k for a dynamite worship leader than $65k for an average one. In fact, I'd rather find a volunteer than pay an average employee anything. The difference between a volunteer and a mediocre employee is less than the difference between a mediocre employee and a really good one. 

Baseball has a statistic called WAR, which is Wins Above Replacement. It’s a way to measure how much better a player is than an equivalent AAA (the top minor league) player would be. Most players are between -1 and 1 WAR. Shohei Ohtani is the best player in baseball and as of this writing is a 7.1 WAR player. This may not seem like much of a difference but when most divisions come down to only a few games, the difference matters.

This is an inexact comparison, but I think we see the same thing play out on church staffs. We’ve probably all worked with someone who - for myriad reasons - was just a lot more effective than those around him. Hopefully, that person was also kind and humble, but even when they aren’t, they are still a lot more effective. I highly encourage you to seek out those kinds of leaders and pay them so they stay on your team. I’m not saying to hold out for the Shohei Ohtani of pastors, I’m just saying don’t overpay for mediocre, easily replaceable people.

Save your money for people who can really make a difference. Combine two positions into one and pay them double, you'll get more out of the one guy who can handle two jobs than two mediocre people. To be clear, I am sure they are good people, they are simply mediocre employees.

The secondary effect of this is that really good people will help your church grow, which provides more money to hire more people. Mediocre people don’t help your church grow.

Look, I get how all this sounds. We’re talking about people and church ministry in sports and business categories and that can feel weird. I could probably dress all this up in Bible words and make it sound better, but I’d rather be clear and have it sting a little to make the point. This isn’t the only way to afford your ideal staff, but it’s the first I want to talk about because I think churches waste a lot of money on staff members who could be largely replaced by two to three volunteers who are managed by one highly capable leader.

So before you go out and hire another associate pastor or your first Executive Pastor for that matter, make sure you have the money to pay someone who can really make a difference. It would be better for you to wait an extra 6 months so you can afford to pay top dollar for a top performer than to skimp now and get someone who won’t move the needle.