Compensation is one of the most tangible ways organizations demonstrate value and care for their people. In this encore episode, we revisit a conversation with Susan Griffith Byers, Founder of Church Compensation Services, to explore how fair, strategic pay practices can strengthen culture and support a flourishing workplace.
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In this episode:
Importance of Rewarding Compensation
- Compensation is both a stewardship issue and a key driver of a flourishing workplace. (02:26)
- It typically accounts for about half of a church’s budget. (02:28)
- Fair and strategic compensation attracts, retains, and motivates staff. (02:32)
Susan’s Background and the Founding of Church Compensation Services
- Over 20 years of compensation experience in global consulting, tech, and healthcare. (02:56)
- Launched Church Compensation Services to fill a data gap for large and growing churches. (03:09)
- Developed the MegaChurch Compensation Survey, now used by hundreds of churches. (03:24)
Compensation Principles for Churches
- Many corporate best practices apply to churches: fairness, equity, defensibility, and clarity. (04:34)
- Introduced the “Compensation One-Two-Three” framework:
- Compensation Philosophy – aligning pay approach with mission and vision. (04:41)
- Reliable Survey Data – specific, clean data that reflects roles and church contexts. (04:44)
- Salary Structure – market-aligned pay ranges that support consistent decisions. (04:47)
Survey Data Best Practices
- Strong surveys include:
- Clear participation instructions. (06:58)
- Detailed job descriptions (100+ roles in 20 ministry areas). (08:10)
- Differentiated data cuts (e.g., by budget, region, attendance). (05:41)
- Transparent definitions of pay components. (05:49)
- Compliance with U.S. DOJ Safe Harbor guidelines. (06:09)
Developing a Compensation Philosophy
- Should reflect the church’s context, values, and financial realities. (08:56)
- Two examples:
- Affluent suburban church: Needed to attract highly educated staff; paid near the 75th percentile. (09:08)
- Inner-city church: Focused on mission-driven staff; paid near the 25th percentile but offered holistic benefits. (10:03)
Understanding the Competitive Labor Market
- Not all roles should be benchmarked against other church roles. (12:29)
- Examples:
- Southern California church: Benchmarked production roles against Hollywood talent. (12:37)
- Silicon Valley church: Benchmarked I.T. and admin roles against tech sector norms. (13:04)
- Defining the labor market ensures appropriate and competitive compensation. (13:39)
Role of Job Documentation
- Essential for accurate benchmarking and fair pay. (13:35)
- Lack of documentation can lead to pay inequities and legal risks. (14:15)
- Fast-growing churches often skip this step, leading to misalignment and inconsistencies. (14:32)
Pay Administration and Compensation Policies
- Clear policies are needed for:
- Promotions, demotions, lateral transfers, and new hires. (15:10)
- Bonuses and incentives. (15:40)
- Recommend documenting all pay-related practices in a “compensation handbook.” (15:45)
Peer Groups for Benchmarking
- Peer group selection should reflect purpose (engagement vs. compensation). (16:16)
- For compensation, budget size is the most significant variable. (16:39)
- Suggests comparing with similar or slightly larger churches (8–10 peers) for robust data. (16:52)
Importance and Structure of Salary Ranges
- Salary structures provide a framework for decision-making and equity. (18:10)
- Should reflect job hierarchy, have enough grades for differentiation, and align with the market. (18:29)
- Church Compensation Services provides turnkey solutions for churches that lack internal resources. (18:58)
Common Compensation Challenges in Churches
- New churches often lack consistency in pay administration. (19:23)
- Disparities exist where the same job title is paid very differently. (19:32)
- A costing analysis reveals outliers—those paid too low or too high—and the cost implications. (19:54)
Strategies for Managing Pay Discrepancies
- Red circling high-paid employees (limiting increases, offering bonuses instead). (20:09)
- Gradually raising low salaries over several years by adding 0.5–1% to the salary budget. (20:34)
- Use of a merit matrix to allocate higher raises to low-paid, high-performing staff. (20:58)
- Moving away from cost-of-living increases toward merit-based systems for fairness. (21:41)
Ongoing Compensation Program Maintenance
- Participate annually in the MegaChurch Compensation Survey to stay market-aligned. (21:58)
- Regular updates to salary structures ensure employees can progress and stay competitive. (22:25)
- Ongoing participation supports the broader church community—“good corporate citizen” mindset. (22:14)
Current Compensation Trends
- Regional cost-of-living pressures don’t always align with local salary norms. (23:25)
- “Vacation destination” churches often pay more than the market due to housing costs. (23:29)
- Rising minimum wages can compress salary structures, forcing higher-tier raises. (23:57)
- Rapid salary growth in roles like:
- Production (20–40% increases). (24:20)
- Stewardship (30% increase in two years). (24:27)
- Regional campus roles (due to growing size and complexity). (24:42)
Regional Campus Compensation
- New survey report will focus on regional campuses with data by campus size and structure. (24:57)
- Churches differ in whether campus pastors teach or share responsibilities centrally. (25:13)
- Gathering more granular data to reflect these structural differences. (25:41)
Why Compensation Strategy Matters
- Rooted in biblical stewardship and the principle of reciprocity (“Give, and it will be given”). (25:58)
- Fair, strategic compensation increases staff motivation, engagement, and productivity. (26:21)
- Not all employees give their best—those who do should be rewarded appropriately. (26:37)
Real-World Success Story
- A large Midwest church implemented a custom salary structure and salary offer tool. (27:01)
- The tool standardized internal and external offers, ensured fairness, and improved decision-making. (27:12)
Recap of the “Compensation One-Two-Three”
- Compensation Philosophy – Align with mission, define market, guide decisions. (27:37)
- Reliable Survey Data – Tailored, clean, relevant to church roles. (27:40)
- Salary Administration Structure – Framework for consistency, fairness, and transparency.(27:48)
Susan’s Mission and Services
- Compensation is often overlooked or under-resourced in smaller churches. (28:08)
- Church Compensation Services fills the gap, offering expert help at a lower cost than traditional consultants. (28:41)
- Susan’s passion stems from personal experience—her husband is a pastor. (28:54)
- Website: churchcompensationservices.com (29:43)
Final Thought for Church Leaders
- Church staff and pastors matter just as much as congregants and communities. (29:26)
- Leaders play a crucial role in building strong, healthy churches. (29:33)
- Encouragement for leaders: your behind-the-scenes efforts deeply impact the flourishing of the church. (29:39)
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