THRIVING IN MINISTRY
Church Salaries in 2022
This content is written for Talanton Church Services. Church Salaries 2022 | Kyle Willis
On today’s episode of the Thriving In Ministry podcast, we are talking about church salaries and wages in 2022. Kyle Willis, Founder of Talanton Church Services, and Dr. Dace Clifton of DailyPastor.com. Talanton Church Services exists to help church leaders create margin in ministry by providing church staffing solutions.
Dace Clifton: Kyle, I'm excited to talk about money today and finances and so what's going on?
Kyle: Not much but Mo Money Mo Problems; I'm not sure which ‘90s rapper that was. Do you know?
Dace: I don't know but I am familiar with the phrase and you know, Kyle, I don't know if you can help me. I have the ability to spend money but it's harder for me to make money, you know? I love to spend it. Seems like it's a little harder for me to gather it, so that may be a conversation offline but, yeah, this is going to be good.
Kyle: We've done a lot in that crypto space, which is actually just cost us money at this point, but it's okay, Dace. It is okay.
Dace: I know, I'm terrible at looking back and saying, I should have sold here and then three days later it's worth $2. But I digress.
Well, Kyle, let's get on to talking about the good stuff or I should say, the green stuff. Kyle, do you have a verse of the day that really can kind of set the tone for what we're going to talk about?
Kyle: Yeah, so what we do want to talk about today is really looking forward to 2022. Here we are in the middle of the summer, many churches haven't even yet started their budgeting process for 2022, and so this is a scripture that's going to kind of help lead the way and it's out of Romans 13:8. It says, “Owe no one anything except to love each other, for the one who loves another has fulfilled the law.” And really, there are a lot of scriptures or passages in the Old Testament, New Testament, that talk about giving, that talk about planning. A ton of scriptures around finances, both in our personal and in the church life, but we want to take this opportunity today as we're talking to pastors and church leaders, and really kind of lay a framework or dive a little deeper than we usually do, specifically on salaries for church staff and kind of what that should look like.
Dace: Well, that's awesome and you know when you read that scripture, the thought that came to mind was, money is just another way that we can love Jesus and love other people and so I appreciate you sharing that. Because this is really a spiritual matter, right, Kyle? It's a matter of stewardship, so we want to do this well. Do churches always do this well, Kyle?
Kyle: Well, you bring up that word stewardship and I do love that word. Part of what I get to do through Talanton Church Services is to help churches walk along this pathway and a lot of it is just in fractional staffing around accounting facilities, things like that. But, specifically, as I'm having conversations with church leaders, the word stewardship sometimes can be viewed as just expense control. And that's not necessarily the case and I think those who do it well, they're looking at both those things that you brought up in your personal stuff which is the income and the expense. And so, talanton is that Greek word out of Matthew 25 and the parable of the talents and this idea that our master has entrusted us with something and he is going to come back and say, Hey, what did you do with it? I've shared this with you before but sometimes people say, How do I know if I'm stewarding it well? The first part of it we're all familiar with where he says, Hey, well done, you were faithful with little, I will set you over much. But oftentimes we forget about the second part where he says, Enter into the joy of your Lord. So if you're a pastor or church leader listening to this and you say, Hey, am I stewarding it well? I would say, is it bringing you joy? So if you walk into a finance meeting and those are better conversations, those are pleasant, they're not knock out, drag down….I mess those up, what is it, knock down? Knock out? What is it, Dace?
Dace: It's a knockdown, drag out fight, that's what it is. I'm familiar with those actually but thankfully not at my own church.
Kyle: Yeah, so, when we're looking at it, what I was going to say….specifically, we want to talk about wages and salaries today. But the Why is really a good place to start. So when we look at this I would say, if you are a pastor or church leader….maybe you're on a finance team or an elder board and you're listening to this….when we're talking, let's start with Why and the Why goes back to that scripture. We want to treat our pastors fairly. We'll talk a little bit about what that means when I say fair, but on the Why question, let's do this.
A typical church in America (I'm going to categorize them all here), their personnel expenses are roughly 55 to 60%. If you go over 60%, you're going to have problems. Especially if you've got a mortgage payment, rent, things like that - if you go over 60%, you're really going to have very small amounts to do actual missions and ministry. If you're on the other side of that, you may be stretching your team too thin, especially if you're in the 30s or low 40s. And so really if you're saying, Hey, what should my total personnel expense be, I would recommend anywhere in that 50, 52, 54, somewhere in there would be a great place to start. So if you're above that, we may need to look at planning a little bit differently or restructuring. And if you're below it, there's an opportunity to take care of your pastoral team maybe a little bit better than you are.
Dace: Kyle. did those figures imply that if you are a debt-free church, you paid off your facility, no outstanding debts?
Kyle: Yeah, these are guidelines, so you're going to have to look at your historical context but that’s the guideline and that's why I kind of have a range. I would say if you have personnel along with building, that number really can't be, let's say, above 75%. You'll never get out. So yeah, if you have no debt, then obviously that's going to be more money available. I know at one point we had Eric Costanzo on the podcast - what they've done with their church, and now that they've paid off their building is they use that building payment just to fund missions. So, it doesn't have to flow directly back to salaries is what I would say.
Dace: Wow, that's awesome Kyle; thanks for that. Good, good benchmarks there to keep us on point. Let me ask you this question: For a lot of guys, maybe it's their first church or maybe they're just newer, a few years into ministry or maybe they're not and they're wanting to know the process of increasing pay on their staff or staff member that didn't work with the finance team or an elder team, how could you outline the process of increasing pay?
Kyle: So now we're talking a little bit about the How, and that will look different in any church. You may have a personnel committee or a finance committee that specifically deals with this, and even within the same denomination or grouping of churches, pay in that process will look differently. Historically, what I would say is there's usually some sort of governing board, It's not just the senior pastor, saying, Hey, I'm going to give myself a $10,000 raise this year. Maybe if you're a church plant you have some of that autonomy but usually there's some sort of governing structure that will set the pay. So that's really kind of who I'm talking to today and if you're a pastor and you say, Hey, I don't feel very comfortable raising this issue, maybe you can share this episode with them. But as a general statement, what I would say is the sooner you can plan and the sooner you can have these conversations, the better outcome is going to be. And that's why we're recording this right now, in the summer, many months before most people even think about this, we're kind of talking about it because we want to look forward. You are going to have a turnover - we've seen a much higher level of turnover with pastors, with staff, over the last 6-18 months probably. I think it's going to accelerate. So you may not have a totally clear picture, but now's a great time, especially if your boards or committees meet once a month, to at least start the conversation of what 2022 looks like.
So to kind of speed this up a little bit, the How can be really however you want to. You can decide to give a cost of living increase or a merit increase or a combination of both. So, a cost of living increase - in fact, the New York Times released an article this week as we're recording this - talking about May’s inflation numbers. A cost of living says, it used to be this, to live and survive. So, we know in 1970s, that housing costs are much more different than they are in 2020, 2022, and that is due to inflation. In fact, the New York Times article said that inflation is its highest in May than it has been since 2008 and really, in some indicators since the early 90s. The reason we're raising this flag today is many churches did not give their personnel raises in 2020 and 2021. So with normal inflation of 2-3%, you already kind of took that out of their pay. And my fear is that if we don't keep up with inflation plus looking back, that your staff is not going to be as engaged or as well taken care of. So that How would be a cost of living increase that says, Hey it's 3%, 5% - if inflation goes crazy we may need a 20% just cost of living increase, but then merit would be another way. So you could do annual increases or merit increases, maybe like end-of-year Christmas bonus. I would love it if churches would try like quarterly performance bonuses. So maybe there were specific goals that we wanted to meet…we said we X number of youth, right, were drawn into the church. I think that's a great way to show some love to the youth pastor, with a $200 merit increase. And then you're also going to have those looking forward. So you have your cost of living increase and then you would have a merit increase that would be for specific employees at specific amounts, so you may say, 5% here, 2% here, 1% here or nothing. But that's kind of a way to look at it.
Dace: And one point that I will just highlight is, if you're a Finance or Committee Team or an Elder Board and you don't give your staff cost-of-living pay increases, you are systematically paying them less. In other words, you're basically just saying if you haven't done this on an annual basis or every 12-24 months, then basically what you're doing is you're just asking this person. Hey, next year, I want you to start with less money and less money and less money so that's so important.
Kyle, let me add one other thing for our listening audience. If you're listening right now and you really need some help with an Elder Board or Finance Team, if you will mail me a $25 check and a telephone number, I will personally call your Finance Team and say, Hey, what are you doing?!? I won't do that, but I digress. Thanks for keeping me in check there, man.
Kyle: No, that's a funny threat, Dace, but you can always give me a call. I'll give my cell phone at the end of this; I'd be happy to have a conversation with anybody you want. I'm very passionate about this.
Dace: So if you want some hillbilly to call your team and rant and rave, you call me. If you want a professional who knows what he's talking about, who actually has experience in corporate America and the church world, a long history of legacy, then you probably need to call Kyle. So if you want to professional, call Kyle. If you want to some hot-headed redneck, call me.
Kyle: Don't don't set the bar too high there, Dace. For the sake of time, we did talk about the Why, we talked a little bit about the How, and even the Who - and so I would make that distinction between different people on your team. I wouldn't say a flat 5% that covered both costs of living and merit for everybody. You're going to have some that you want to reward or pay differently, but I do want to circle back real quick to this idea of fairness. I brought that word up earlier.
When we look at fairness and pay, this can be a tricky topic and in one sense these people have been called – pastors, church leaders have been called to the ministry - and I wouldn't say they're stuck, but they are in that position, they volunteered and said, Hey, I'm here. On the other hand, I would say that we should be able to take care of those people who are looking after us. In fact, Dace, as we've interviewed a number of pastors this year and will continue to do it for the rest of this year, many pastors have expressed concern about their personal finances, even in conversations that we're not recording. That comes up fairly frequently and I don't think these guys or these people that we're talking with are necessarily being doom-and-gloom over it. I think it's just something they struggle with.
Dace: Kyle, you make an excellent point there and I want to highlight for any of our listening audience, I think that it is the wrong attitude and approach for any church to approach their staff, or their pastor, or their leadership and say, Our goal is to get the maximum for the minimum amount of money. I don't see that in Scripture; I see exactly the opposite. I see that the workman is worth his wage, I see there's scriptural support for that. I think this idea that we want to squeeze out the maximum amount of performance and longevity for the absolute minimum amount of investment, you know because we’re basically too cheap. I think that it's a bad practice at best and it's sinful at worst.
Kyle: Well, and that's where this idea of fairness, so if I can come back to that. That's why I want to bring it up. So I wouldn’t compare fairness in the market - so this church pays this, so we pay this. Like, all youth pastors make $32,000 and maybe we're in California so we need to pay them $45,000, right? I would look to comparable jobs out in the marketplace. And that is where we have seen wages really rise under a booming economy. If maybe you're paying Pastor $50,000 and in the marketplace they can make $55,000, what I think has happened over the last couple years is that maybe we bumped him from $50 to $51. In that secular job, that one out in the marketplace went from $55 to $65. So now all of a sudden, we created this delta. And that's what I'm encouraging pastors, church leaders to do is to have those conversations to say, where do we need to be in relation to the marketplace not compared to the church down the street.
Dace: Man, that's some great advice, great counsel there. I want to shift gears for a moment and I want to talk about the future of church staffing because finance is related to the future of church staffing and you’ve got some interesting ideas, you've got some predictions and some observations regarding what's going to happen in church staffing, so let's talk about that.
Kyle: Yeah, when I look at the future of what I would call the church office, I think it's going to be different. I think it's going to be different in a lot of ways. I think in some respects, we are going to want our pastors and church leaders to continue to do more. I think we're also, in that same breath, I would say we're probably going to respect a work/life balance a little bit more.
So you have those opposing sides. But I think that one of the ways - and I've seen this and it's a project that I've been working on for the last couple years and really has fueled a lot of where Talanton is going in the future - is this idea of what I would call Centralized Offices. in another way, or more applicable way for your church would be to think about these 1099 or these contractors, these independent companies. I think that's the future of a lot of church work. And now, very, very large churches are going to continue to have media, they may have a staff of media, but I think there's opportunity in the marketplace to have churches come together, through Talanton or through themselves, their own denomination, to work together and say, Hey, all of us need a quarter of a media person. Let's find three other churches that want to do this. So, it centralizes those operations. I just see no other way around it, with the pressure on giving, on top-line income, and the rising cost and expenses in church, and we know personnel is going to be more than 50%. I don't see a way around it, that we're not going to reach across the road or across the denomination, county, wherever that be, and start centralizing these things. So things like accounting, things like janitorial work, media production, all those sorts of things. I think they're going to be centralized. It may take longer than I anticipate but at some point, Dace, when we sit around the dinner table sometimes, you'll look back and you'll say, Remember back then? Kyle was on to something. I definitely think that's going to happen here in the next decade, for sure.
Dace: Well, I really like the idea actually. And the reason why I like it is because, as a pastor of a smaller/medium-sized church, we could always use that that full time media guy, that full time IT guy and there's just sometimes the budget doesn't allow for us to have full time personnel in some of these really important roles. And I think that all of our pastors, leaders, and churches need to recognize that there is a certain expected level of excellence that is going to be required in all of these areas that Kyle's mentioned. So obviously accounting, but also production and online presence, and all of these various things, where really the bar for churches, including small and medium-sized churches is set really high. This is just what people expect. This is what young families expect, what everybody expects, for things to be on point in that area, and it is cost-prohibitive. So I think, Kyle, what you're what you're talking about here and what you're predicting, is these things that you're doing through Talanton Church Services, like fractional staff, like connecting various like-minded ministries that might have some differences in who's going to be behind the pulpit, but ultimately they all need to have a good online presence, they need to have fractional staff to maybe to cover janitorial or facilities or all of these things. Man, I'm excited and really that type of situation really could benefit a lot of churches. This is not a shameless sales plug, I mean this is just the truth.
I think about my own situation - we could absolutely benefit from scenarios like that.
Kyle: Well, Dace, you know where to find me, so give me a call. Hey, I will say this last thing. This is another maybe predictive or it's already happening. Here's what's going to happen - if we don't pay our church staff, maybe what they deserve in the marketplace, they could leave they could seek better opportunity, but I think the first indicator is that they're going to become either bi-vocational or co-vocational. Bi-vocational will be, they get a job at Lowe's or something else to supplement their income; co-vocational would be finding another organization - maybe it's another church - to do video production during the week. Maybe it is something else where they are trying to have an alignment with the mission so they go work for a nonprofit, designing T-shirts, something like that. I think that's what I would say is co-vocational. I think you're going to start to see those creep in and when those creep in - and I just don't want pastors and church leaders to be too late - so I'm not trying to pitch something here. We do want you to think about it.
As we wrap up this episode, pastors, church leaders, Finance Committee, Personnel Committee, whatever your role in the life of the church is, here's what I want you to know. Start having the conversations now. Whether you're listening to this in June, July, or August, and you say, Hey, what does 2022 to hold, it may be a little bit too early to tell because we don't know what inflation is going to be, but we know it's coming. So how are we going to adjust our giving? How are you going to adjust our other expenses? How are we going to do these things to take care of our staff? Because we want to have a thriving ministry, we want to have margin for ministry. And that's really what we're talking about. So, start planning now, you can have those discussions around the conference room table and put something in place.
And then the other thing I would say is, if you say you're going to do a cost of living and merit (maybe merit waits till the end of the year), but the cost of living increase, even if you don't give it till 2022. I would still go ahead and announce it now. If you come to the decision, We're going to give everybody 3% starting in January, go ahead and tell your team that and say, Hey, this is going to be the bottom so that they won't get nervous and start looking elsewhere.
Dace, I went over on time but I'm just super passionate about this. And so I will say this, if you have any questions give me a call. Kyle Willis, my cell phone 405-343-8700. I’d love to help, just have a conversation on the record, off the record and just be able to encourage you in what you're doing in your church.
Dace: Kyle, thanks so much for this insight and expertise that you've given us today and I just want to add or echo one final point and that is, if you are in part of the decision making process for compensation for your church, one final factor you need to remember - the past 12-24 months have been really hard on the vast majority of church and church staff. Whatever we can do to alleviate some measure of stress…they have been in the fire, and so whatever we can do to alleviate some stress I think it's going to be positive, however we can help them, however we can encourage them and finance is a major part of that. I mean a note is good, but let me tell you what somebody provides financial support, that is going to alleviate some stress. It's going to help their family, their kids. So, I just think that that's what honors God. Oftentimes, people that got into ministry, they didn't do it - at least the folks we're talking to - because of the money. They got into it because of their love of God and so we need to honor that and support them in every way that we can. Kyle, thanks again for your expertise and remember, For those that are listening, be sure to like, subscribe, leave a review, and also reach out to us with any questions that you have at TheDailyPastor@gmail.com. You can also check out Talanton Church Services as well and see some of the opportunities that Kyle's got going on. And lastly, we just want to encourage you, keep your focus on Christ and working for the Kingdom, loving God and loving people, and stay in the fight.
Written for Talanton Church Services. Church Salaries in 2022 | Kyle Willis