“Why Churches Must Budget for Today’s Cost of Hiring Staff” is a post by Steven Knight, the founder and Executive Director of Lead412.com. To join our Content Team or to submit a guest post for consideration, you can learn more here.
Why Churches Must Budget for Today’s Cost of Hiring Staff
As church leaders, we all want to attract and retain great people—individuals who align with our mission, love our communities, and help lead with excellence. But in today’s economic climate, hiring and retaining top talent comes with a critical factor: budgeting for the true cost of living.
It’s no secret that inflation, housing costs, and other economic shifts have drastically impacted the cost of living in recent years. For churches, this means that hiring staff at outdated salary levels is no longer viable. If we’re serious about building and sustaining healthy, thriving teams, we need to budget with today’s realities in mind.
The Real Cost of Hiring
What is the real cost to hire staff members? This needs to be carefully considered in order to ensure your church is set up for success and the staff members can afford to join and stay on your team!
1. Competitive Salaries:
To attract qualified candidates, churches need to offer salaries that reflect the current market. Ministry may be a calling, but staff members also have financial needs, including housing, healthcare, and retirement planning. When salaries don’t keep up with the cost of living, it not only discourages great candidates but also risks burnout and turnover among existing staff.
Keep in mind that your pastoral staff are considered self-employed for social security tax purposes, so they pay 15.3% in taxes while employees at a for-profit company pays just 7.6% in taxes for both Social Security and Medicare.
2. Comprehensive Benefits:
In addition to competitive pay, churches must also provide strong benefits packages. Health insurance, retirement contributions, paid time off, and flexible work options are increasingly non-negotiable for ministry professionals. These benefits signal that your church values its staff and is committed to their well-being, both personally and professionally.
3. Geographic Considerations:
The cost of living varies greatly depending on location. Churches in urban areas or regions with rising housing costs must account for this in their compensation packages. Even for smaller towns, salaries need to reflect local realities, especially if candidates are relocating from higher-cost areas.
The Impact of Under-Budgeting
When churches fail to budget for the current cost of hiring, the consequences are felt across the board. Candidates may decline offers, forcing you to restart the hiring process. Existing staff may feel undervalued and overworked, leading to morale issues or turnover.
Over time, these factors can erode the effectiveness of your ministry, hinder growth, and potentially even cause some churches to close their doors from lack of staff.
How to Plan for Today’s Hiring Costs
- Do Your Research: Conduct salary benchmarking for ministry roles in your region. Understand the average compensation levels for comparable positions and adjust accordingly.
- Consider Inflation: Factor in cost-of-living increases when budgeting for salaries and benefits. Building this into your annual budget ensures you’re keeping up with financial realities.
- Communicate Clearly: Be transparent with your leadership about the need to invest in staff. Helping your board understand the connection between generous giving and staffing quality can foster greater buy-in for budget increases.
Investing in Your Team Is Investing in Your Mission
At the end of the day, church staff members aren’t just employees—they’re mission-critical partners in ministry. Budgeting for their real financial needs isn’t just practical; it’s a reflection of our commitment to creating healthy, sustainable church environments where leaders can thrive.
By planning ahead and budgeting well, you’re not just meeting today’s hiring costs—you’re investing in the future of your ministry. And that’s a decision worth prioritizing.
Steven Knight is the founder and Executive Director of Lead412.com. He provides church consulting for churches who want to grow and make a bigger missional impact in their community and beyond. Are you ready to build a strategy that will take your church to the next level? You can learn more here.
