A Word to Church Leaders On Pastoral Compensation

"Whatever the cash salary or total compensation package being offered to a pastor it contains a hidden message. Your hidden message says that you appreciate the work of your pastor, that you want your pastor to stay with you for a long time, or that you are ready for a new pastor.."

Most church leaders I know take seriously their God given responsibility to provide for their pastors. And . . . I am certain that you want to do the same.

Here are seven important considerations to take note of as you develop your pastoral compensation package.

First, consider the Bible's teaching on compensation.

Start your annual planning of the church budget with a Bible study on the subject of pastoral compensation. For example, note Paul's statement to Timothy in First Timothy 5:1 7-1 8.

"Let the elders who rule well be considered worthy of double honor, especially those who work hard at preaching and teaching. For the Scripture says, 'YOU SHALL NOT MUZZLE THE OX WHILE HE IS THRESHING,' and 'The laborer is worthy of his wages." (NASB)

Even a casual reading of these verses make it obvious that the better the pastor is at teaching the Word of God the larger should be his salary. The Williams translation reads, "deserving twice the salary they get."

Another important verse to consider is, Galatians 6:6-7 which says . . . "let the one who is taught the word share all good things with him who teaches. Do not be deceived, God is not mocked; for whatever a man sows this he will also reap."

Second, consider the hidden message being delivered

Whatever the cash salary or total compensation package being offered to a pastor it contains a hidden message. Your hidden message says that you appreciate the work of your pastor, that you want your pastor to stay with you for a long time, or that you are ready for a new pastor.

Reducing a person's salary has always been widely used as a method of communicating dissatisfaction with his performance. The same is true when a pastor is allowed to go a number of years without an adequate review and increase. The result is unexpected resignations. What is your hidden message? What messages are being sent? What messages are being received?

Third, consider the reality of salary compression.

Entry level salaries often increase at a faster pace than the salaries of experienced pastors. In practice this means that once pastors take a position they predictably will find it difficult to receive adequate raises.

The impact of salary compression often is a cause of rapid pastoral turnover. Pastors leave a church every 3-4 years since they instinctively know that they can get a better raise by taking a new entry position than by staying on in their present ministry.

When the senior pastor's salary is used as a ceiling for other staff members, the results of compression on his salary affects what can be paid to other staff members. It often is a cause of low pay for associate pastors.

One way to solve this difficulty is to give adequate compensation raises for years of experience. While years of experience is a debatable value for future compensation, most churches increase their pastor's salary by $250, $500, $750 or $1,000 per year.

Fourth, consider the cost of replacing a pastor.

It is conservatively estimated that the cost of pastoral turnover is equal to one and a half times the salary of the present pastor. For example, if your present pastor is receiving $35,000 it will cost you roughly $52,000 to replace him if he leaves. This happens for a number of reasons.

While looking for a new pastor church leaders become more aware of the current salaries and benefits others are receiving. They often find they must pay a higher salary to get a person with equal experience and skills.

In many cases the present pastor will have purchased or rented a home when the rates for doing so were much lower. When a new pastor comes he most likely will need more money to cover housing costs.

Still another reason for this high cost of pastoral turnover is the fact that it takes a new pastor at least two years to get his feet on the ground and become effective in ministry. Studies have found that a pastor's most effective years don't even come until the 6-7th year! Pastoral turnover in the first five years represents a real loss of value that is difficult to measure.

In short it is economically wiser to keep your existing pastor than to bring in a now one.

Fifth, consider paying a competitive salary.

In long pastorates, the salary paid the pastor has usually not kept up with general increases. When the pastor retires or resigns, the church often finds that the salary they were paying is substantially below the "market." The issue is not one of paying an adequate salary but one of paying a competitive salary.

You may be paying a fair salary in terms of congregational size, the resources of the congregation, the education, experience, work load and responsibilities of the pastor. However, it may not be competitive in the pastoral marketplace with what some other churches are paying.

The real question is not what do you pay your pastor but how do you keep your pastor. Have you kept your pastoral salaries up with the cost of living? What would you have to pay to replace your present pastor? Have you kept compensation competitive with what other pastors are receiving?

Sixth, consider the importance of fringe benefits.

Recently a revealing ad has been run on T.V. Two young fathers are shown talking about several job opportunities. One father indicates he prefers one job over another. The reason? One has a better dental plan than the other.

Benefits are important since they often add more value to a compensation package than the actual dollar cost. As a rule of thumb, you should give a minimum of an additional 20% of the total cash salary in benefits to your pastoral staff. Of course, some churches give more than 20%.

Fringe benefits should not be perceived as an increase in the pastor's salary. While they do represent an increase in the total compensation package, they are realistically a cost of employing a pastor or, as it's known in business, as the cost of doing business. [See the Church Growth Network, April and May 1989 for additional information.]

Seventh, consider the need for continuing education.

Continuing education is a fact of life in our information age society. In many denominations, continuing education is a requirement. Pastors are expected to take a minimum of 10 continuing education hours at a Bible school, seminary or through various seminars each year.

Growing congregations tend to take a pro-active position in this area and make certain that their pastors receive encouragement to continue their education.

For example, consider giving two weeks paid study leave each year in addition to vacation time. Allow couples to share in the same continuing education event. Give a three to six month sabbatical every 5-7 years.

Continuing education is beneficial in that it allows the pastor to experience a time of rest and a recharging of the proverbial batteries. It provides a time to plan and develop new vision for the future of your church. And, it helps guarantee that your pastor will have fresh ideas, more creative ministry and energy to continue ministry in your church.

Conclusion

I've found that growing churches are the ones who take the long-term perspective that the best years of a pastorate seldom begin before the 5-6th year of ministry. And . . . one of the ingredients that makes for long tenure is paying a competitive salary.

This article is adapted from How To Develop A Pastoral Compensation Plan

authored by Dr. McIntosh