The 5% Gap: Addressing the Compensation Challenge in Ministry
Churches and Christian organizations are facing a growing challenge: inflation since COVID has risen nearly 20%, while staff salaries have only increased by about 15%, leaving a 5% gap that directly impacts employee well-being, retention, and engagement. How can ministries effectively reward and retain key staff while staying true to their mission?
In a recent episode of the Flourishing Culture Leadership Podcast, I sat down with Susan Byers, a leading expert in church compensation and founder of Church Compensation Services, to explore the latest trends, practical strategies, and biblical foundations for compensation in larger churches and ministries. If you want to build a thriving workplace culture where staff feel valued and supported, compensation must be a priority.
Compensation Trends in 2025
As we head into 2025, churches are responding in different ways to the financial realities of ministry staffing:
- Modest salary increases: On average, churches are planning 6% salary increases—slightly above the 3% inflation rate, but still not enough to close the pay gap.
- Market adjustments: Some ministries are setting aside part of their budget to bring underpaid employees up to market rates and prevent flight risks.
- Generous benefits: Many churches are absorbing rising healthcare costs, offering 6% more in employer contributions to protect staff from financial strain.
- Robust PTO policies: Churches are providing an average of 22–25 days of paid time off in the first year, recognizing the importance of rest and renewal.
- Tuition reimbursement: Nearly 25% of churches now offer up to $10,000 per year in tuition assistance, investing in staff development and future leadership.
While these trends show churches investing in staff well-being, there’s still a pressing need to bridge the salary gap and ensure long-term financial sustainability for ministry workers.
Building a Compensation Philosophy That Aligns with Your Mission
A strong compensation strategy isn’t just about numbers—it’s about aligning financial decisions with your church’s mission. What are the key questions you need to answer when developing a compensation philosophy:
- What is our mission, and how should compensation reflect it?
- Who are we hiring, and how do we compare to similar organizations?
- What portion of our budget should be dedicated to staff compensation?
- Do we want to differentiate pay based on performance?
- How do we ensure fairness while remaining financially responsible?
One size does not fit all. A church serving an affluent community will have a very different pay philosophy than one focused on outreach to the homeless. Likewise, churches in large cities will have different salary structures than those in rural areas.
The Power of Transparent Communication
Even the best compensation plan can fail if it’s not clearly communicated to employees. Too often, staff underestimate the true value of their compensation package—especially when benefits like healthcare, PTO, and retirement contributions are not fully explained.
Some best practices for communicating compensation effectively:
- Use multiple channels—staff meetings, written summaries, online portals, and one-on-one conversations.
- Break down total rewards—help employees see the full picture of salary, benefits, and growth opportunities.
- Train leaders—ensure managers understand and can clearly explain compensation decisions to their teams.
- Engage employees proactively—create a culture where staff feel comfortable discussing salary expectations and career growth.
A benefit is not a benefit if employees don’t know about it or understand its value.
Biblical Foundations for Compensation
As Christian leaders, our approach to compensation should be grounded in biblical principles of stewardship, fairness, and generosity. Susan shared several key scriptures that reinforce why paying staff well matters:
- Proverbs 14:23 – “All hard work brings a profit, but mere talk leads only to poverty.”
- Revelation 22:12 – “Behold, I am coming soon, bringing my reward with me, to repay each one according to their deeds.”
- Matthew 25 (Parable of the Talents) – Jesus commends faithful and diligent work, emphasizing rewards based on stewardship and effort.
- 1 Timothy 5:18 – “Do not muzzle an ox while it is treading out the grain,” and “The worker deserves his wages.”
Fair and thoughtful compensation isn’t just a leadership best practice—it’s a biblical imperative.
Future Trends in Compensation
Looking ahead, Susan highlighted several emerging trends that will shape church compensation in the coming years:
- Greater pay transparency—churches will need to be more open about salaries and how pay decisions are made.
- More structured career paths—creating job families and clear salary progressions to help staff grow within the organization.
- Flexible benefits—churches may begin offering customizable benefits packages to meet the needs of a multi-generational workforce.
- Competitive offers for top talent—churches will need to offer stronger financial incentives to recruit and retain highly skilled leaders.
A Call to Action: Rewarding Compensation in Road to Flourishing
If churches want to thrive in ministry and impact, they must invest in their people. Compensation is not just an expense—it’s a strategic investment in your mission.
In my book Road to Flourishing, I explore how rewarding compensation is a key driver of a healthy workplace culture. Leaders who prioritize fair pay, transparent communication, and biblical stewardship will attract, retain, and engage the best talent for kingdom work.
Now is the time to act. Review your compensation strategy, listen to your employees, and build a culture where staff feel valued and supported.
Want to take the next step? Learn more about building a flourishing workplace at workplaces.org.
Al Lopus : Dec 17, 2024 8:17:27 AM
Al Lopus