How Much Should Churches Spend on Their Staff?
Ministry is all about people reaching people and disciples making disciples.
Because of that, it should be no surprise that the largest financial investment most churches make is on people, specifically the church staff.
Because this is typically such a significant financial commitment, it often raises a number of key questions. Let me do my best to address some of the common questions we receive on this topic.
1) How much should we pay our staff?
The Bible is pretty clear on this one. Paul explained it this way:
“Elders who do their work well should be respected and paid well, especially those who work hard at both preaching and teaching. For the Scripture says, ‘You must not muzzle an ox to keep it from eating as it treads out the grain.’ And in another place, ‘Those who work deserve their pay!’” (1 Timothy 5:17-18, NLT)
The bottom line is that church staff leaders should be paid well. In fact, Scripture provides no caution for paying too much, but we do see this warning about paying too little.
So how do we judge what’s appropriate? For pastors and other staff leaders, I think you need to begin by asking what other professionals in your community make. Think about other roles in your community that require multiple degrees and experience. What do those roles earn? This should be the higher standard than what other churches in the community pay their staff members. Then, for other roles on the team, compensation should be adjusted to reflect similar roles in the community and the relationship to the leaders identified above.
2) What if we can’t afford to pay our staff well?
Then you probably have too many staff members. Remember, there’s no biblical mandate establishing how many staff members your church should employ. But, there is Scriptural direction to compensate church leaders well. With that in mind, I always recommend that churches hire fewer people and pay those people well.
When churches do that, I find they tend to hire higher capacity leaders who are able to raise up other leaders and build volunteer teams. More ministry gets done through fewer staff leaders. In fact, some of the largest churches I’ve served in a consulting capacity have had the fewest staff compared to overall attendance.
Here’s another long-term benefit of that strategy. Talent attracts talent. Leaders attract leaders. When you raise the bar for the capacity of the people you hire to your church staff, it will ultimately increase the capacity of the people who want to join your team.
3) What percentage of the budget should be committed to staff?
I always hesitate to answer this question, because every church is different. Churches minister to different numbers of people. Churches have different ministry strategies. They offer different ministry programs. Every church is unique.
I can tell you that in the 200+ churches that The Unstuck Group has served, these churches invest about 50% of their overall budget on staff compensation and benefits. Our consulting team generally encourages churches to try to stay in the range of 45 to 55 percent of total budget.
We’ve seen churches that have gone as high as 65 to 70 percent. Churches that don’t have facility expenses, including rent or mortgage payments, may be able to get away with investing a higher percentage of their budget on staffing. For most churches, though, these higher percentages raise red flags. These ministries may be in a danger zone because any slip in the economy or monetary giving will likely mean a staff reduction will be necessary to make ends meet.
4) Should we be concerned with how other churches compensate their staff?
I think this becomes a higher priority as your church experiences health and growth. At some point, you’ll find that it’s necessary to make sure that you’re not only paying staff well compared to similar professionals in your community, but you’ll also need to stay competitive with other similar churches. If you don’t, you run the risk that other churches will begin to hire away your best staff.
Leadership Network – Large Church Salary Study
LifeWay – Southern Baptist Convention Compensation Study
The Church Network – MinistryPay.com
If you don’t find the information you need in one of those resources and you need custom solutions for specific roles or specific types of churches, I recommend Vanderbloemen Search Group, one of our strategic partners. They provide custom reports based on the size of your church, your geographic region and your type of church.
2) Who should determine the staff’s salaries?
It shouldn’t be the congregation. Your church should never be voting on line items within your budget like the specific salaries of individual staff members. That includes the senior pastor.
I once sat in an all-church gathering where the congregation was voting on the salary of the youth pastor. It was an awful experience. Before the vote, everyone who disagreed with the student ministry strategy (primarily older people who wanted a more traditional youth group) complained that the youth pastor was making too much. Then the lower-wage earners complained that the youth pastor might make more than they did in their jobs. All the while other staff members were in attendance learning for the first time that their co-worker might be making more or less. Needless to say, voting tends to create division in churches.
Similarly, I don’t think the church’s board should be involved in setting each individual salary. Because they don’t work with the staff on a daily basis, there’s no way for them to appropriately judge the performance and capacity that should influence compensation decisions. Ideally, there should be some system in place for the board to set the senior pastor’s salary. And then the senior pastor should have authority to make the final decision for compensation levels of everyone on his or her team.
The board generally sets the overall church staff budget and may also establish salary ranges for various positions. But, the senior pastor and his or her team should have the flexibility to set compensation as part of their leadership responsibility. Frankly, if the board can’t trust their senior pastor to make those decisions, the board probably needs to find another senior pastor.
As I mentioned at the beginning of the article, this is an important consideration for every church. The quality and capacity of your staff team will directly impact the health and growth of your church.
It should be of the utmost priority to ensure that your team is compensated appropriately.