Compensation and Benefits Analysis
Having the compensation conversation is always uncomfortable. We’ll give you some great tips on when to start that conversation, what to say, and how to determine the fine line between being generous and being a great financial steward.
Key Takeaways
Ahhh…. the part that, according to the type of person you are, you’ve been looking forward to, or absolutely dreading. Here are some important things to consider when you are preparing and discussion your compensation and benefits packages for candidates:
The braces and trombone rule
When you hire someone, they need to have enough compensation to live well with their family. They need to be able to buy braces and trombones for their kids.
You need to pay enough for families to be a part of the community... play T-ball... take dance classes, etc.
You need to pay enough for families to be a part of the community... play T-ball... take dance classes, etc.
You need to be generous AND a good steward
You need to be as generous as possible while at the same time being a good steward.
You know what your budget is and what you can pay.
What you pay will limit (or expand) your candidate pool.
You need to be able to compensate your staff member so that they will be able to model generosity in your church and community.
Example: you don't want your staff member to have to decide between buying a box of Girl Scout cookies or getting a pair of shoes for their kids.
Pay enough so that they can lead and model generosity.
You know what your budget is and what you can pay.
What you pay will limit (or expand) your candidate pool.
You need to be able to compensate your staff member so that they will be able to model generosity in your church and community.
Example: you don't want your staff member to have to decide between buying a box of Girl Scout cookies or getting a pair of shoes for their kids.
Pay enough so that they can lead and model generosity.
You need to pay this much...
Enough so that your staff member can live in the same community as those he/she is ministering to.
If your staff member cannot live where they minister, their effectiveness will be severely diminished.
If your staff member cannot live where they minister, their effectiveness will be severely diminished.
Just give me a number!
We would, but there isn't one.
Every church is different.
First, understand what it REALLY costs to live in your area. We recommend DataUSA.io as a great resource to get you started.
Another comparison is to see what your local school is paying. Teacher salary for a youth pastor/kids/worship. XP, assistant principle. SP could be principal. Salaries are normally public, and are extremely local (based on your specific community).
Adjust for degree/experience.
Ask around.
Every church is different.
First, understand what it REALLY costs to live in your area. We recommend DataUSA.io as a great resource to get you started.
Another comparison is to see what your local school is paying. Teacher salary for a youth pastor/kids/worship. XP, assistant principle. SP could be principal. Salaries are normally public, and are extremely local (based on your specific community).
Adjust for degree/experience.
Ask around.
When do you start the salary conversation?
You probably should start the conversation earlier than you would like.
It's an uncomfortable conversation. Always. But know that it is uncomfortable on the candidate side of the conversation as well. No one likes to talk money. (OK... very few people enjoy this conversation).
We recommend that you start with a 30,000 foot conversation about compensation BEFORE you pay to bring someone in for an on-site visit. You can mention during one of your interviews a salary range that this position is offering. If the candidate is not in your range, they will, in most cases, self-select out.
REMEMBER: Everyone thinks they are at the top of the range! 🙂
ASK: Is this CLOSE to where you need to be?
It's an uncomfortable conversation. Always. But know that it is uncomfortable on the candidate side of the conversation as well. No one likes to talk money. (OK... very few people enjoy this conversation).
We recommend that you start with a 30,000 foot conversation about compensation BEFORE you pay to bring someone in for an on-site visit. You can mention during one of your interviews a salary range that this position is offering. If the candidate is not in your range, they will, in most cases, self-select out.
REMEMBER: Everyone thinks they are at the top of the range! 🙂
ASK: Is this CLOSE to where you need to be?
Be upfront with your church's approach to salary negotiation.
We've said this before, but we need to say it again. Every church is different.
And when it comes to salary negotiation, this is absolutely the case!
Churches usually fall into three camps when making a salary offer to a potential staff member:
1. This is the offer. Take it or leave it. Don't negotiate. We will be offended.
2. Here's the offer. We expect you to come back with a counter-offer. We won't be offended if you come back to us with a different number.
3. Here's what we're able to do, but we really like you... so let's try and work this out.
Just about every church will take one of these three approaches.
But very few churches will let candidates know which approach they are taking.
We suggest that one person on your team have a candid discussion with the candidate about how your church normally deals with salary offers and negotiations. They will set them at ease and sets you up to be both generous and a good steward of church finances.
Take the lead to be clear in this area. To be unclear is to be unkind.
The sooner you find out about possible gaps in compensation, the better.
And when it comes to salary negotiation, this is absolutely the case!
Churches usually fall into three camps when making a salary offer to a potential staff member:
1. This is the offer. Take it or leave it. Don't negotiate. We will be offended.
2. Here's the offer. We expect you to come back with a counter-offer. We won't be offended if you come back to us with a different number.
3. Here's what we're able to do, but we really like you... so let's try and work this out.
Just about every church will take one of these three approaches.
But very few churches will let candidates know which approach they are taking.
We suggest that one person on your team have a candid discussion with the candidate about how your church normally deals with salary offers and negotiations. They will set them at ease and sets you up to be both generous and a good steward of church finances.
Take the lead to be clear in this area. To be unclear is to be unkind.
The sooner you find out about possible gaps in compensation, the better.
Total package vs. salary plus benefits
Try to stay away from 'total package' language if at all possible.
"This is the salary. Here are the benefits." (If there are no benefits, say so).
The biggie here is health insurance. If the staff member has a family and is paying out of pocket, it will probably cost them up to $20k to purchase that coverage. Keep that in mind when you determine your salary package. Everything that they need to take out for their out-of-pocket expenses decreases that 'all-inclusive' salary you are providing for them dollar-for-dollar.
"This is the salary. Here are the benefits." (If there are no benefits, say so).
The biggie here is health insurance. If the staff member has a family and is paying out of pocket, it will probably cost them up to $20k to purchase that coverage. Keep that in mind when you determine your salary package. Everything that they need to take out for their out-of-pocket expenses decreases that 'all-inclusive' salary you are providing for them dollar-for-dollar.
Your biggest competitor may not be another church...
The last couple of years has seen a lot of realignment of salary and benefits packages in the secular workplace.
For example, a job at an Amazon.com warehouse or working for UPS now provides competitive salaries and full benefit packages (including health and life insurance and even tuition reimbursement).
Your competition isn't necessarily what another church might pay, but what another local company could offer.
This has made churches adjust their salary levels up as well. The current reality is that it will cost more (sometimes significantly more) to replace or hire a staff member than it did a couple of years ago. Keep this in mind as you prepare your compensation and benefits package.
For example, a job at an Amazon.com warehouse or working for UPS now provides competitive salaries and full benefit packages (including health and life insurance and even tuition reimbursement).
Your competition isn't necessarily what another church might pay, but what another local company could offer.
This has made churches adjust their salary levels up as well. The current reality is that it will cost more (sometimes significantly more) to replace or hire a staff member than it did a couple of years ago. Keep this in mind as you prepare your compensation and benefits package.
Additional Resources
We’ve assembled some great supplemental learning tools that will help you in your search for a healthy, long-term fit for your staff team. All of these exclusive Chemistry Staffing resources are available for free download for you and your search team.
Ask Us Anything...
You probably have a question or two when it comes to developing your salary and benefits packages. We’d love to help answer your questions… Ask away!
Your Presenters
Todd Rhoades
Co-Founder
Todd has invested over 30 years in serving churches, having served as a worship pastor for over 15 years, a church elder for more than a decade, and in various ministry leadership roles in both the business and non-profit sectors. As the original founder and developer of ChurchStaffing.com, Todd fundamentally changed the way thousands of churches search for pastors and staff on the internet. Todd served for over a decade as a Director with Leadership Network, providing him exposure to the innovative trends in today’s church and inside knowledge of how healthy churches operate. A graduate of Cedarville University, Todd lives in Bryan, OH with his wife, Dawn.
Matt Steen
Co-Founder
Matt has served the local church for over two decades as a youth pastor, church planter, and executive pastor. Originally from Baltimore, Matt currently lives in the Orlando, FL area with his wife Theresa, and has a B.S. in Youth Ministry from Nyack College and an M.Div. and MBA from Baylor University. Certified as an Urban Church Planter Coach by Redeemer City to City and as a StratOp facilitator by the Paterson Center, Matt has made a career of helping churches thrive through intentionality, clarity, and creating healthy cultures. He is convinced that a healthy church is led by a healthy team with great chemistry, and loves partnering with Chemistry’s churches to do great things for the Kingdom.
Need help with ?
As part of the purchase price of this course, you also receive a free 30-minute consultation with one of our Church Coaches at Chemistry Staffing to help you in any area of your search. Need some help finding qualified candidates, sorting resumes, or developing your compensation and benefits package? We’re here to help and guide you in any area of your staff search.