Addressing Staff Salary Discrepancies
The personnel committee of First Church sits down for its annual staff salary review. After a few moments of silently perusing the numbers, someone eventually verbalizes what everyone else is thinking: “Why is Pastor Brian paid so much less than Pastor Larry? Hasn’t Brian been here longer? And Larry hasn’t even finished seminary. That doesn’t seem right.”
Second Church, across town, has a different question. Word on the ministerial street is that every other church in the community pays better than they do. And when they recently had an open role to fill they were discouraged to learn their leading candidate declined taking a position elsewhere. The pastor couldn’t help but wonder, “Was it because of the money?”
These are fair questions, and in some cases, they may have good answers. But unfortunately, for many churches, there is often no rhyme or reason for why staff salaries are what they are. For some churches, the issues could be attributed to a change in leadership or a new philosophy of staff compensation. In another instance, it might be that the church got off track due to some lean years financially. And then there’s the real possibility that leaders simply made a few unwise or uninformed decisions.
So, what do we do when there seems to be a discrepancy (perhaps more than one) in our staff salary structure?
There are three guiding principles church leaders should bear in mind as they work to address these issues.
1. It’s essential to sit down with church leaders and develop a plan.
Identify where the discrepancies are; determine an order of priority for addressing them (begin with your most valued roles/individuals first); and then prayerfully take steps in your annual budget planning to ensure that staff members are compensated appropriately.
2. Create a staff salary structure that you can evaluate and use for the future.
Begin by putting on paper what the actual salary range for each category on your staff is currently (i.e. pastors, directors, associates, administrative assistants). Then, using reliable salary survey data, local salary comparisons, and demographics of the church and community, determine what your target range needs to be for each category. For a variety of reasons, this will look different from church to church.
The low end of the range for a category should represent what a starting salary would be before any unique factors are applied. The high end of the range should represent what the church would be able/willing to pay a highly qualified and experienced individual in that category. It’s important to note that this tool should be reviewed and updated annually. A starting salary of $50,000 shouldn’t still be $50,000 three years from now. The pay ranges need to increase as salaries change in order to account for inflation.
Questions you might ask as you develop a salary structure for your church include: Are we fair in our compensation? Are we consistent? Are we competitive? Is this sustainable?
3. Establish consistent criteria for setting and evaluating salaries.
One reason churches get out of balance with their compensation structure is they will sometimes set a salary without considering the bigger picture. A common mistake is to think, “We just need to pay them whatever it’s going to take to get them here.” In some cases, that may mean the number is lower than it should be. In other cases, it is higher than it should be. More often than not, however, this approach will leave you with a bit of a mess and eventual discrepancies and inconsistencies. As you establish your salary criteria, it’s important to consider both the role and the individual.
DETERMINING SALARIES FOR DIFFERENT ROLES
There are at least five questions to ask when setting a salary for a particular role.
1. What’s the scope of responsibility?
In most cases, the greater the responsibility, the higher the salary. Variables might include supervision responsibilities (of both staff and volunteers), the extent of financial oversight, decision-making authority, etc. This is a common reason that two seemingly similar pastoral roles might be paid differently.
2. What’s the geographic location of the church?
Because cost of living varies across the country, a church in a major city on the West Coast is understandably going to pay differently than a rural church in the Midwest.
3. What are the demographics of the church?
As an example, if a church located in an upper-middle class suburb is made up largely of white-collar professionals, that ought to inform, to a degree, how they compensate members of the staff.
4. What are other churches paying for this role?
It’s not about keeping up with the Joneses, but it’s important to be comparable and competitive with your pay, whenever possible. Networking and exchanging information with other churches may help you know if you are low, high, or right on target. To the extent possible, be sure you are comparing apples to apples.
5. What’s the church’s overall budget?
To be clear, a big budget shouldn’t necessarily mean big salaries, nor should a small budget necessarily mean small salaries. There are small churches who pay handsomely, and there are larger churches who are somewhat stingy. With that said, it’s important for a church to live within its means. Sometimes discrepancy issues arise because a church has stretched itself too thin and is trying to employ more staff than it can afford. A hard but sometimes necessary decision is to operate with fewer staff so that a church can adequately compensate those it has.
DETERMINING SALARIES FOR INDIVIDUALS
Additionally, there are four considerations to keep in mind when setting a salary for a specific individual.
1. What’s the individual’s value to the church?
While it’s true that no staff member is indispensable or irreplaceable, there are individuals who bring unique value to the table for a church. It may be their skillset, institutional knowledge, or something more intangible. Within reason, it’s certainly appropriate for such persons to be compensated accordingly.
2. How long has this person served on staff at the church?
If someone has been with you for a long time, it stands to reason they have served well (or they wouldn’t still be there). It makes sense for them to earn more than the employee who is just starting out.
3. How long has this person served in vocational ministry?
This is primarily for those serving in a ministerial or pastoral role and may have come from another church. A seasoned leader with 20-plus years of vocational service under his belt will likely be paid more than someone in a similar role who is serving in his first church staff job.
4. What about education?
Each church will uniquely set any education prerequisites it may have for specific staff roles. The time and effort invested in preparation and training ought to count for something in the consideration of their pay, similarly to one’s years of experience.
Here are some additional principles to keep in mind when addressing discrepancy issues:
- Be consistent with how you pay similar roles on your staff. In other words, be careful about doing for one what you don’t do for another. An example of this might be, “We are paying Mary a higher wage, but since the budget is tight, we’ll hire Linda for a little less and just give her more vacation instead.”
- Neither gender, marital status, nor family status should be criteria for one’s salary. Churches can find themselves on a slippery slope if they decide to pay one candidate more than another simply because one is married and the other is not. Likewise, the staff member who has five children shouldn’t be compensated more than the one who doesn’t have children simply because their family has more dependent-related expenses.
- Consider rewarding short-term or one-time exceptional performances with a bonus, as opposed to a permanent pay increase. A couple of “good job” raises that are permanent can quickly create the beginning of a discrepancy.
- On the other hand, use a salary adjustment (or merit raise) to reward a demonstrated increase in value to the church over an extended period of time. Don’t misunderstand—there is certainly a place for permanent increases to one’s pay, but if not administered wisely, they can quickly stretch your salary structure. (Note: this is different than a cost-of-living adjustment the church might provide staff-wide on a more regular basis.)
Finally, it is important for church leaders to recognize that addressing salary discrepancies likely won’t happen, in full, in a single budget year. For many churches, it may take several years, but it is important to stay the course. The matter of compensating your church staff fairly (and even generously) is not an unspiritual one. In fact, it’s biblical and God-glorifying, and churches should work diligently toward making it a reality.