Hiring staff members is not easy. You have to find candidates, engage them in a thorough interview process, administer assessments, check references, and then make your hiring decision. Part of that hiring decision is focused on compensation. Jesus said, “The worker deserves his wages” (Luke 10:7).
So, what should those wages be when you bring somebody onto the team? Furthermore, when and how should you make compensation adjustments? These are important questions, and too often they are answered haphazardly, or in a manner that is misinformed or inconsistent.
To help you in your decision-making process when it comes to salaries, start with these seven factors:
1. Role: What level of responsibility does the position carry? While every person in an organization is created equally, the roles in the organization are not. Simply put, some roles carry far more responsibility than others. Some roles feel a greater weight of leadership, and some roles require a very specialized set of skills.
These factors need to be taken into consideration when setting salaries. A good question to ask is, “If this team member left today, how much would it cost to replace him or her?”
2. Geography: Where in the country are you located? The cost of living can be vastly different from region to region. You have to consider geographical location when setting salaries. In addition, you might consider whether the church is located in an urban, suburban, or rural environment.
3. Size: What is the size of the church? What a youth pastor makes in a church of 200 is not likely to be the same as what he or she is paid at a church of 1,000. The size of the church usually impacts the size of the salary. This is a hard reality for some team members to grapple with, but it’s a reality.
You might have a highly qualified candidate who could make significantly more at a larger church. But the fact is, if you’re not a large church, you probably can’t pay that salary.
4. Experience: What track record of results does the candidate bring to the table? You have to consider two aspects of experience when it comes to setting salaries. First, somebody who has 20 years of experience will be (and should be) compensated differently than someone who has just two. There is value — and often a ton of wisdom — in those extra years of experience.
What a youth pastor makes in a church of 200 is not likely to be the same as what he or she is paid at a church of 1,000.
Second, you have to keep in mind that experience doesn’t necessarily equal effectiveness. That’s why the question to ask when it comes to experience should be, “What track record of results does the candidate bring to the table?” While years can be important, a track record of results usually makes a bigger impact.
5. Performance: How is the staff member meeting and exceeding expectations? For existing team members, you have to consider performance before giving raises and making compensation adjustments. In other words, you have to evaluate their impact on the church and the areas of responsibility you’ve entrusted to them.
The best metric is whether they are meeting and exceeding expectations. If you haven’t first determined and communicated expectations, you won’t be able to effectively measure performance.
6. Package: What benefits need to be included with this role? Benefits are wide and varied in organizations today. They can include health insurance, dental insurance, life insurance, disability insurance, a health savings account, matching retirement, cell phones, continuing education, and more.
You have to decide for your organization as a whole which benefits to offer. You may also have to determine what tiers of employment you provide, such as part-time and full-time, and the benefits that apply to each tier.
7. Budget: What does the budget allow? Finally, you can’t offer a salary that you’re unable to pay. You have to take into account the church’s budget. First, determine the overall percentage of the budget allocated toward salaries. For most churches, this is 35% to 55% of the overall budget.
Different churches have different philosophies on what this share should be. Furthermore, the size of the church, as well as the financial obligations of the church, can skew this range in one direction or the other.
Second, determine what you are actually able to pay. Churches should do their best with what they have while exercising wise stewardship of what God has entrusted to them.
These seven factors are not necessarily the only things to consider when setting or adjusting staff salaries, but they are a good place to start. In addition, you might consider seeking out compensation surveys, or hiring a staffing firm, before setting salaries for new hires or adjusting compensation for existing team members.