After serving on church boards for decades and helping set salaries for dozens of church staff members, I’ve learned that setting compensation fairly is one of the most difficult tasks for church administrators and board members. Many factors might prevent a pastor or staff member from getting paid more. I make a distinction, however, between acceptable reasons and unacceptable reasons churches cannot pay more to reach a fair wage. Here’s my list:
Reasons I Don’t Like but Can Accept (for Now) While Working on Them
The overall giving in the church is not what it needs to be. On the whole, when churches receive more, they pay their staff more. The gap may be because of hard economic times, insufficient preaching and teaching on giving, the consumer debt of members, poor church spending decisions in past years, or other reasons. Encourage the church leaders to work on what they can here.
The church needs to keep its overall budget “in shape.” A local church should generally keep its staff costs to no more than 45–55 percent of the total budget. If that percentage has been higher—not unusual in a smaller church—then some belt-tightening will usually be needed.
The church is working to create more parity among staff members. Someone else on staff may be more underpaid than you are, and the church is using its limited increases to “right-size” that person’s salary first.
The senior pastor is not yet paid enough. Whatever the senior pastor gets paid sets a guideline for the salaries of other staff members. For example, the second-highest-paid person on staff will almost invariably be paid two-thirds of the senior pastor’s salary. Raise the senior pastor’s salary, and everyone else usually benefits.
The church board has more brakes than accelerators. When it comes to spending money, board members are either “accelerators” (comfortable taking risks and spending more) or “brakes” (uncomfortable with taking risks and increased spending). The best boards include some of both.
Reasons I Cannot Accept—and You Shouldn’t Either
The board doesn’t really know what your role involves. If your role is more hidden in nature and people don’t see the benefit of what you do, they may not fairly compensate it. You may need to educate church leadership about your work.
There is gender inequity. Nationally, there is a gender wage gap, with women being paid about 15 percent less than their male counterparts (depending on who’s calculating and how). The gap exists in the church, too. If you are a female staff member, you are more likely to need to ask about your compensation.
The church is paying based on the perceived needs of the employee, and not on the nature of the position.In a church, people usually know each other’s home situations and sometimes let that influence how they pay. So the church might be paying someone more than it should because the employee has a large number of children. Conversely, the church might be compensating someone less than it should if the employee is single or if the employee is married to a high-earning spouse. These reasons are discriminatory and illegal, and they can land ministries in hot water if churches aren’t careful.
There is an unaddressed or unresolved breakdown in trust between board and staff. Suppose a former senior pastor consistently overspent the budget or asked for reimbursement for questionable expenses. The current leaders may be holding back now because of that history. If that’s the case, you can’t fix this, but you can suggest an outside consultant be brought in or outside resources be consulted.
Where to Go from Here
Now that you know what may be inside your elders’ minds, a little caution is in order. When you feel disappointed about your pay, you will probably start by assuming it’s because of the negative reasons on this list. But in my experience, most of the time, it’s because of the more acceptable (but still challenging) reasons.
If you talk with someone about your salary and assume they have the best motivations, I guarantee the conversation will go better. Start the conversation with something like this: “I know it’s really hard to determine compensation, and there may be many good reasons why I’m being paid as I am. It would help me, though, if you could explain more about how my salary is being set and how I might be able to see it increased." According to one compensation study, people who ask for raises tend to get them about 75 percent of the time, even if it’s not as much as they wanted.
My takeaway: If you approach the pay raise conversation as outlined above and make the “ask,” you’re positioning yourself as best as you can.
Order the 2018 Compensation Handbook for Church Staff for detailed help creating compensation packages for several key staff positions.
Kevin A. Miller is Rector of Church of the Savior in Wheaton, IL, and an editorial advisor for ChurchLawAndTax.com.
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