Pt. 2: Raising Salaries

This is the second in a series of blogs that we began last week, called Staffing in a Bad Economy.

Most of our churches are in need of more leaders and many actually need to add to our team. Doing so in an economic and cultural moment like this one adds layers of uncertainty that should give us pause. So how can we add staff and prepare ourselves to add staff down the road?

Last week, we talked about the need for leadership development. A consistent leadership development pipeline will provide you with cheap and even free leadership to bridge the gaps in our staff and provide the staff members we need when we need them. But leadership development isn’t a cure-all, we need to do more.

This week, we are addressing part two in this series and you are going to love it.

#2. Raise salaries every single year, no matter what.

Your finance guy will hate me for saying this, but you need to be giving everyone on your team a 5% raise every year as a baseline. If they deserve a raise, give them more. 5% is for everyone who doesn't deserve to be fired. If you think someone doesn't deserve 5% because of their performance, put them on an improvement plan - and still give them the raise.

You are paying the position, not the person. The person you have in that position can come or go, but you are establishing what that role is worth and that should be constant no matter who is in the role.

So why are we giving everyone 5% raises every year? To keep up with the market so that you don't get yourself in a bad spot down the road. Churches already chronically underpay people. Nearly everyone who goes from the business world to the ministry world has to take a pay cut. I don't like it, I don't think it's right, but it's true.

Building in 5% raises keeps you competitive in a market that is already outpacing us. It communicates value to your staff. It keeps your staff from struggling financially. And in an economy like this one, it allows you to be more competitive.

More than any of it though, it forces you to think about money in the church the way a normal organization does. I think churches have a really messed-up relationship with money. Catholic priests take a vow of poverty but I never did. Obviously, there are examples of pastors who make ridiculous amounts of money and are predatory on their people. Those dudes are the tiniest fraction of a minority.

The vast majority of pastors are making below-market wages. When I started my first church, I didn't get paid a dime for the first two years. When I did get paid, my salary was $36,000. Our church grew to be almost 5000 people on 5 campuses and I never made more than $65,000. I don't say this to put down our elders and I know that they have right-sized salaries since I left.

My point is that most people on church staff are underpaid, and that makes churches vulnerable to market forces like the downturn we are experiencing right now because the country can get expensive a lot faster than our salaries can rise.

If someone is underpaid relative to the market and inflation suddenly goes crazy, all of our people are going to start looking around for other options and there will be equivalent jobs that they could get that will pay them 20-40% more than what you are paying them.

Do not spiritualize this issue by questioning their calling if they leave your church. Their first calling is to their family, and if they can't pay the bills, they will - and should - leave your staff.

I know what you are thinking, how are we supposed to pay competitive salaries with a church budget? The same way any other organization does. Do you think any other company in your town has so much money that they can hire whoever they want and pay them whatever they want? No. Everyone has a budget, everyone has constraints. You are not unique that way.

The key is to figure out how to allocate your dollars in the most effective way that you can. The basic process is simple. Take your overall projected income and assume 50% of that money will go towards salaries. Then start at the top. What do you need to pay a Lead Pastor in order to attract and retain someone who can lead your church well? OK, now how much money is left? What is the second thing your church needs in order to function effectively? Probably music or an administrator. Ask the same questions, what will it take to attract and retain a worship leader who can effectively lead your church in worship?

In most scenarios, those two positions are the most important and should garner most of the financial attention. As a staffing company, we can tell you that there is nothing more difficult to find right now than a Worship leader. Those dudes are always tough to nail down, but now they are almost non-existent. Don't tell your current worship guy this, but he is the hottest commodity in the church market right now and can demand a serious salary elsewhere.

So, if you want to keep him, pay him.

This blog is creeping a bit, so let me restate my premise. You need to raise salaries by 5% every year so that you can maintain competitive salaries and be prepared for moments like these where inflation makes everything crazy. We'll talk more about the last reason to keep paying people competitive salaries in the next blog so stay tuned. For now, plan to give every position on your staff a 5% raise for the next budget cycle.