How do you determine your church staff size?
This staffing complication has only gotten more complicated in the past few years. How you determine your staff size may determine more about your church’s future than you think.
Staffing by Ratio
Staffing by the ratio of attendees to staff members is the most common staffing determination, and has been for decades.
Go back 15 or 20 years. Staffing by ratio to attendance was straightforward. Essentially, everything we did then was in person — church services on Sunday morning, a Wednesday night gathering, and perhaps your church had something on Sunday evening. Even if you were a much larger church that offered recreation and camps, they were all in person.
Staffing by ratio for all in-person experiences was simpler. Not to suggest it was always simplistic, but it was relatively simple. You decided how many staff positions were necessary per attendee. Your ministry model affected the staff-to-attendee ratio (highly relational ministry models often require more staff), but overall, the formula was more straightforward.
As churches grew more robust, the staffing ratios evolved to meet the programmatic needs. In the 1960s, the attendee-to-staff ratio was approximately 500:1. As church offerings changed and increased, the normative ratio decreased in correlation. Before the pandemic, a healthy balance was between 80:1 and 120:1. Again, your ministry model affects this ratio.
Enter the pandemic and church attendance changes.
As you know, the days of determining staff size based on physical attendance are gone. Or at least gone as a singular metric. Most churches spent anywhere from a few months to 1.5 years without physical gatherings. And when we reopened the doors, patterns of attendance permanently changed. During the pandemic, if you attempted to control staff size by physical attendance ratios, you may not have kept your job, much less all the other staff around you.
The pandemic accelerated trends and exposed many hidden issues. One disturbing, hidden trend was how we, as church leaders, thought about staffing. When a church bases its staffing only on in-person attendance, anything outside of a butt in a seat doesn’t get the attention it requires (and even deserves). But that’s the beginning of our pending problems with this staffing approach.
Three Major Problems from Attendance-Based Staffing in Church
Not to suggest this version of staff decisions didn’t have a place, but times have significantly changed. Attendance-based staffing:
- Automatically (and typically only) pushes new staff hires to areas of physical growth. That might not seem problematic, but when you begin considering the digital side of your church, attendance-based staffing falls woefully short.
- May accidentally motivate your current staff toward one goal — people inside the four walls. If physical people predicates all staff additions, your team might/will prioritize attendance growth over everything else (like discipleship).
- Ignores the financial implications and opportunities of church staffing.
Some churches attempted to add additional complexities as a solution. Many churches adopted more complicated staffing models designed by spreadsheet geniuses. Most of these insanely complex models created staffing boundaries tied to physical attendance and some database size or new database additions as a secondary condition. It was massively tricky and still rather inept.
A Simpler, More Flexible, and Safer Staffing Solution: Staff Expense to Revenue Dollars
From a staff perspective, how do you consider all the confusion brought on by digital and physical church expressions in our current church climate?
More complicated spreadsheets may work, but I have a better idea.
Total staff expense divided by total annual revenue. In this approach, we identify the percentage of our staff salary and benefits that allows our church to do three critical things:
- Create margin in our annual budget,
- Give annual cost of living increases, and
- Provide time to adjust our staffing expenses if we begin experiencing flat or declining revenue for more than two years.
I’m not as mathletic as some of you, so let me lay this out as clearly as possible. Here’s how it works:
Budget Assumptions: Let’s assume your church brings in $500,000 annually to make the math easy. You’ll need to allocate this budget across staff costs, ministry environments, and margin. I’d suggest a 10% margin target.
On the staff side, we should also assume that we’ll give staff a cost of living increase each year. We’ll call that 3% (although currently, it might be 25% – thanks inflation!).
In simple terms, your budget might look like this:
Sample Church Budget
- Annual Revenue: $500,000
- Kids and Students Programming: $75,000
- Adult Ministry Programming: $75,000
- Production and Services Expenses: $50,000
- Other Expenses (Facilities, IT, Etc.): $50,000
- Margin Target: $50,000
- TOTAL without Staffing: $200,000
This budget leaves us with $200,000 for staffing to break even while maintaining our 10% margin. Staffing expense is all things — salary, insurance, 401k contributions, etc.
Now, let’s do some simple math. We HOPE that revenue will grow each year, but there is no guarantee this will happen. Let’s assume flat income and flat programming expenses (which is a big assumption). The only expense increase in our model is staffing due to cost of living increases. Again, we’ll call that 3%, again.
Staff Expense Scenario 1: Over 5 years, the staffing budget grows accordingly:
- Year 1 = $200,000
- Year 2 = $206,000
- Year 3 = $212,000
- Year 4 = $218,000
- Year 5 = $225,000
To cover this increase, we most likely cut into our margin. That’s a problem, as we’ll have unforeseen costs and future capital needs that this margin will fund. But, all in all, the above budget scenario begins with a staffing percentage of 40% and ends at 45%. That’s pretty healthy, but half of our margin is now gone. Budgeting for margin gives us a little wiggle room.
Let’s break the model…
Staff Expense Scenario 2: Let’s pretend we began the year with the same $500,000 in revenue but budgeted staffing at $300,000. This cuts out our $50,000 margin and reduces other expenses to make up the additional $50,000 gap. With flat revenue over 5 years, the staffing budget increases to:
- Year 1 = $300,000
- Year 2 = $309,000
- Year 3 = $318,000
- Year 4 = $327,000
- Year 5 = $338,000
A staff expense of $300,000 equals 60% of our revenue. That’s heavy, especially considering programming costs are not likely to remain flat. In this example, our pro forma at year 5 shows a 68% staffing budget. That should scare every church leader.
Staffing by Dollars
I’ve always preferred to gauge staffing load by dollars spent than by attendance. Perhaps that is more true today than ever before. As a leader, when you know the total amount of staffing costs you can healthily carry, it allows you to:
- Creatively hire within the target percentage. You can control the staffing allocations across ministries, including digital spaces.
- Stop feeling the pressure to hire only in areas showing increased attendance. Perhaps these areas deserve more staff. Or, maybe, being forced to think this way forces us to ignore more significant staffing opportunities.
- Hire younger and potentially less expensive staff members where appropriate.
- Balance your mix of part-time and full-time hires. Having a staff member with full-time attention is nice, but part-time staff costs less and gives us a greater staff presence on Sunday.
- See financial warning signs well in advance of detrimental results.
If you’ve been staffing to ratio, consider these questions to evaluate where you are today:
- What is your current staff expense to revenue percentage?
- Do you have margin built into your budget?
- If your revenue remains flat and you give your staff an annual cost-of-living increase, how long will it take before you can no longer break even?
When I was at North Point Ministries, our target percentage for staffing expenses was 43%. Why 43%? Because that was the magic number that allowed for salary increases for several years even if revenue was flat.
So what’s your magic staffing expense percentage? Discover the percentage now and define the best target for your church, assuming flat revenue.
ONE MORE THING
I’m going to spend some more time this month talking about staffing in the church, so be sure you, your staff, and your friends subscribe to stay connected to this conversation.