The most valuable resource at any church is the human resource. Yet, churches often stop short when budgeting the financial resources for hiring and retaining talented, qualified, high-capacity employees. Churches that want to show genuine care for their staff can do so through appropriate compensation and comprehensive benefits.
Compensation
Those tasked with operating a church already know the heartache of keeping costs aligned with donations. Since compensation typically consumes the largest portion of the operating budget, it’s often the most scrutinized. There are many methodologies to help churches align their compensation budgets, like the FTE (Full-Time Equivalent) employee-to-congregation ratio and the healthy benchmark of compensation percentage to the total operating budget. Unfortunately, aligning compensation costs for many churches leads to noncompetitive salaries and wage stagnation.
Use Salary Surveys
To operate a church in the tension of paying staff competitive wages and avoiding a negative cash flow that could lead to financial disaster requires planning. To start, churches should use salary surveys from large sample groups with adequate data from your region. The cost of living in New York and California is quite different than in Nebraska. Use the salary survey as a tool to compare the wages your church is paying to remain competitive.
Avoid Wage Stagnation
Wage stagnation occurs when the employee’s wages have little or no increase over time. This is particularly difficult during times of inflation when buying power is weakened. The remedy to wage stagnation requires budgeting cost of living adjustments (COLA), merit increases, or both. It’s challenging to increase wages during financially difficult times. Still, churches that want to retain high-capacity employees need to find ways to increase compensation for their staff while keeping their budgets in check. This may mean having fewer employees who lead teams of volunteers to accomplish the church’s mission.
Benefits
Attracting and retaining talented employees takes more than a competitive salary; the church must provide a comprehensive benefits plan. Churches should glean from their for-profit counterparts and not only offer benefits but allocate a portion of the budget to contribute on the employee’s behalf. To help reduce turnover and increase employee satisfaction, consider the following benefits for the church staff.
- Health: Contrary to what many believe, medical costs, not debt, are the leading cause of bankruptcy in America. Getting sick is hard enough; getting sick without insurance is a whole new world of stress. Providing employees with quality medical, dental, and vision plans helps to reduce the financial stress associated with medical issues. Providing coverage doesn’t mean the church has to pay 100% of the premium. Per the U.S. Bureau of Labor Statistics, on average, employers paid about 67% of the premium for family coverage and 78% for single coverage.
- Disability: Churches that want to show their employees that they are more than just a cog in the machine will provide long and short-term disability insurance to cover a portion of the employee’s wages if they cannot work due to illness, injury, pregnancy, etc.
- Life: Recent statistics show that about half of all Americans do not have a life insurance policy. An inexpensive yet profound statement the church can make is to provide its employees with a term life insurance policy.
- Time Off: Whether the church decides to offer vacation time, paid time off (PTO), or unlimited time off, churches that provide this benefit have employees who are less stressed, have improved productivity, and are less likely to burn out.
- Retirement: Unfortunately, many Pastors cannot retire because they lack the financial resources, forcing them to work beyond a typical retirement age. Providing a qualified retirement plan is a very strategic way for the church to show care for the staff. Since most churches are 501(c)(3) non-profit organizations, they can provide a 403(b) or 403(b)(9) plan. To encourage participation in retirement planning, churches should match (or contribute directly) to the employee’s plan.
In his first letter to his young apprentice Timothy, the Apostle Paul wrote, “Elders who are leading well should be admired and valued. Double up on the honor shown them; care for them well—especially those constantly and consistently teaching the word and preaching.” 1 Timothy 5:17 (The Voice). Paul knew that ministry is hard work and that those who answer this calling are worthy of their wages. Churches desiring to recruit and retain talented and qualified staff must keep the pay competitive and avoid a set-and-forget mentality for salaries. However, paying the staff fairly is only the start; providing comprehensive benefits like health and retirement shows that the church cares for its employees as individuals.
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