Struggling to keep up with rising compensation demands while staying true to your mission? In this episode, we sit down with Susan Griffith Byers, Owner and Founder of Church Compensation Services, to explore key compensation trends, biblical principles, and practical strategies to help your church or ministry attract and retain top talent.
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In this episode:
Trends in Church Compensation (2025)
• Inflation since 2021 has been nearly 20%, while church salaries have only increased by about 15%, leaving a 5% gap. (04:44)
• In 2025, churches plan to increase salaries by 3.6%, slightly above the current 3% inflation rate but still not enough to fully close the gap. (05:03)
• Some churches use market adjustments to increase pay for employees significantly below market rates or at risk of leaving. (05:16)
• Churches are absorbing rising healthcare costs, with employer increases averaging 7.6% last year. (05:28)
• Paid time off (PTO) benefits are generous:
• Average of 25 days PTO in the first year, increasing to 32 days after 10 years. (05:47)
• Some churches offer unlimited PTO. (05:56)
• Retirement plans are common, with employer matching contributing an extra 3-5% in pay. (06:11)
• Tuition reimbursement of up to $10,000 per year is offered by nearly 25% of churches. (06:18)
Developing a Compensation Philosophy
• A compensation philosophy should align with an organization’s mission, vision, and financial strategy. (08:37)
• Key considerations for churches:
• The demographic they serve. (08:50)
• Where they hire their staff from. (08:54)
• Comparable organizations they benchmark against. (8:59)
• Budget allocation for compensation. (09:04)
• Whether they want to differentiate pay for performance. (09:07)
• Compensation philosophy varies:
• Affluent urban churches vs. small rural churches. (09:29)
• High cost-of-living areas vs. lower cost-of-living regions. (09:53)
• Example: Susan’s husband, a pastor, saw major pay differences working in large vs. small churches, rural vs. urban settings. (09:57)
Addressing the 5% Pay Gap
• Churches should take a multi-year approach to closing the gap rather than trying to fix it in one year. (10:59)
• Annual increases combined with merit-based adjustments and cost-of-living raises can help close the gap over time. (11:18)
• Economic uncertainty is preventing large-scale investments in salary adjustments. (11:31)
Church Compensation Data
• Susan’s compensation database includes 150 large churches with a combined budget in the billions. (12:11)
• Provides a valuable benchmark for large and intermediate-sized churches. (12:25)
Compensation Approaches in Churches
• Churches are split between using cost-of-living adjustments and pay-for-performance models. (13:10)
• Performance measurement is a challenge, making differentiation in pay more difficult. (13:25)
• Some church leaders avoid tough conversations about performance, opting for across-the-board increases instead. (13:39)
• Rewarding key staff for hard work is important for retention and fairness. (13:48)
Importance of Clear Communication in Compensation
• Clearly communicating salary and benefits is crucial for employees to understand their full compensation package. (14:24)
• Organizations may invest heavily in employee compensation, but if employees don’t perceive its value, the impact is lost. (14:41)
• Compensation programs should be simple enough for employees to understand how they can earn more. (14:48)
Best Practices for Communicating Compensation & Benefits
• Work with communications teams to create brochures, intranet pages, videos, and other materials. (14:58)
• Provide just-in-time communication when implementing merit raises, cost-of-living adjustments, or market adjustments. (15:10)
• External marketing resources can help with graphic design and video creation. (15:27)
• Some organizations provide external webpages for benefits information to make it accessible to employees and their families. (15:45)
• Mailing physical benefit information ensures that employees’ families are aware of available benefits. (15:58)
Equipping Leaders to Communicate Compensation
• Train leaders to consistently communicate compensation philosophy, processes, and methodologies. (16:19)
• New leader training should include education on compensation to prevent misinformation. (16:29)
• Leaders should avoid telling employees that they deserve higher pay but HR won’t allow it, as this undermines organizational trust. (17:00)
Biblical Principles of Compensation
• Discussion shifts to how biblical principles can inform salary and compensation structures. (17:42)
• The role of merit-based pay in retaining top employees is examined through a Christian leadership lens. (17:54)
• Scriptures related to fair wages: Hebrews 11:6, Proverbs 14:23, Revelation 22:12, Matthew 25, and “Do not muzzle the ox” reference. (18:01)
• Emphasis on merit-based rewards and biblical underpinning for compensation discussions. (20:02)
Salary Compression and Strategies to Address It
• Definition: Entry-level salaries increase, causing compression with mid-level roles. (20:47)
• Strategies to Avoid Compression:
• Maintain proper salary ranges with minimum, midpoint, and maximum levels. (21:15)
• Regularly review salary structures (every 1-2 years) to align with market trends. (21:33)
• Pay employees within the range based on experience, performance, and skill scarcity. (21:47)
• Implement pay-for-performance models to ensure fair merit-based increases. (22:04)
• Use red-circling (capping salaries) and lump sum bonuses for employees at the max range. (22:40)
• Avoid excessive job hierarchy levels, which can lead to compression. (22:55)
• Address special cases where hiring a higher-paid candidate causes compression:
• Accept the discrepancy if justified. (23:27)
• Adjust the manager’s salary. (22:37)
• Modify the reporting structure. (23:43)
Job Families and Compensation Structure
• Example: Communications Job Family (24:28)
• Roles range from Coordinator → Editor/Writer/Designer → Manager → Director. (24:32)
• Lower-level roles have smaller salary differentials (8-12%) to encourage promotions. (24:59)
• Higher-level roles have larger differentials (10-25%) with wider pay ranges. (25:10)
• Executive Pastor vs. Senior Pastor (25:38)
• Significant pay gap due to different responsibilities and market positioning. (25:46)
Salary Structures Provided by Church Compensation Services
• Created using survey data from churches. (26:28)
• Structures vary by organization size (e.g., <$5M, $5M–$7.5M, etc.). (26:53)
• Adjusted for geographic location to reflect local market rates. (27:27)
• Designed to ensure fair comparisons between similar-sized churches. (27:35)
Pay Transparency and Salary Negotiations
• Growing Importance: Many states require salary ranges in job postings. (28:22)
• Challenges with Transparency:
• Ambiguity in salary range definitions (expected pay, actual range, employee range). (28:34)
• Employees may react negatively if their salary is at the lower end of a posted range. (28:53)
• Best Practices for Organizations:
• Ensure salary ranges are accurate and justified before making them public. (29:09)
• Be prepared to explain salary ranges to both new hires and existing employees. (29:15)
• Church Compensation Services offers salary benchmarking and costing analysis for participants. (29:24)
Salary Ranges & Compensation Strategy
• Employees should be paid within a salary range based on:
• Experience level (29:38)
• Value and contribution to the organization (29:39)
• Scarcity of skills (29:41)
• Fully competent employees should be paid within 10% of the market midpoint. (29:56)
• Salary negotiations can be complex, especially in states where asking about pay history is illegal. (30:09)
• A good approach is to ask candidates about their salary expectations and compare them to internal salary ranges. (30:15)
Compensation Adjustments & Promotions
• External hires typically require a 10-15% pay increase to leave their current job. (30:31)
• Internal promotions should also include at least a 10-15% pay increase. (30:46)
• Bringing in new hires at a higher salary than long-tenured high performers can create internal issues—this needs to be managed carefully. (31:28)
• Attracting employees from high-performing Christian workplaces may require a 20% pay increase. (32:03)
Generational Differences in Compensation Expectations
• Gen Z & Millennials prioritize flexibility, career growth, and mission over money. (32:26)
• The rise of gig workers (PRN in healthcare) means many Gen Z employees work flexible, high-hourly-rate jobs without benefits. (33:08)
• Job hopping, once seen as a negative, is now a common career advancement strategy. (34:13)
• Employers must invest in clear career paths and development programs to retain high-potential employees. (34:44)
• Mission-driven work is highly valued—some organizations offer paid volunteer time off to align with these values. (34:53)
Future Trends in Church Compensation
• Churches are adjusting to:
• Addressing the 5% salary increase gap vs. inflation (37:14)
• Health insurance cost increases of 7.6% (37:26)
• Market adjustments of 3.5% in 2025 (37:31)
• Pay transparency, job families, and structured compensation philosophies are becoming more important. (37:56)
Final Thoughts
• Leaders should not create a culture where employees must leave to receive a pay raise. (35:41)
• Some churches are shifting to varied timing for salary increases instead of annual adjustments. (36:05)
• Biblical principles can provide a strong foundation for compensation philosophy in Christian workplaces. (37:47)
Read a complete, word-for-word transcript of the episode
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