Budget and COLA Changes for 2023
The results from our State of Church Compensation in 2022 webinar survey are mostly positive. Many congregations are growing, offering raises, and increasing the size of their staff. At the same time, 10 to 20 percent of churches appear to be struggling and 7 percent plan on decreasing payroll spending in their 2023 budget.
In short, as ChurchSalary has covered extensively, we continue to see a K-shaped recovery from the COVID-19 pandemic.
The data from this year’s State of Church Compensation Survey is divided into two sections: 2022 changes and anticipated 2023 changes.
Changes in 2022
- Percentage Changes
- Staff Size Changes
- Number of Employees
- Total Hours
- Reasons for Cuts/Decreases
- Benefit Changes
As we reported in May 2022, 43.5 percent of church employees reported receiving a raise in the last year via our National Church Compensation Survey. Out of the 6,797 full-time employees surveyed in 2021-2022, the most commonly received raise was 5 percent. When you combine employees who did not receive a raise (54.5%) as well as those who received a pay cut (2-4%), ChurchSalary estimates that the overall change in wages between April 2022 and April 2021 was 2 percent for pastors and 1.44 percent for staff. Read more about employee raises here.
Overall, the majority of churches increased salaries and overall payroll spending in their 2022 budgets. To save money, around 20 percent of churches decreased the overall size of their staff and 9 percent decreased the hours worked by staff.
According to our survey, 65 percent of churches utilized a gift card or bonus in 2021 to offset the impact of inflation. Over 75 percent of these bonuses or gift cards were offered in addition to a permanent salary/wage increase.
While the percentage change made by 76 percent of churches (either positive or negative) varied greatly, there was a consistent trend of a 4-5 percent increase. This matches the data we published back in May on employee raises in light of inflation.
As part of our COVID-19 and the Church survey, conducted by Arbor Research Group, ChurchSalary gathered data on staffing changes at over 1,100 churches. The results of both surveys independently confirm that staff expansion and contraction is evenly split among churches, as you can see in the chart below.
When we look at total hours worked by church employees between 2021, 2022, and 2023, the trend as a whole is increasing. Meaning that, there are more hours available for part-time employees to work. At the same time, it appears that the number of church jobs as a whole are increasing. Indeed, for every 1 employee let go or fired in 2022, 3.7 were hired.
That said, these changes appear to be moderating in 2023. In other words, fewer churches plan on adding hours and employees in 2023 than in 2022.
Half of the churches that cut salaries or benefits in 2022 did so as a result of decreased giving and/or attendance. The remaining cuts were caused by a combination of increased costs, competition for employees, and/or staffing changes. Many of these cuts were voluntary—the result of planned employee turnover, positions left unfilled, or ministry or programming changes.
Changes in 2023
Churches are planning to make changes this fall to their 2023 budget that largely mirror the changes they made last year. The only noticeable difference is the percentage of churches who plan to change the size of their staff: more churches are looking to hire, and fewer churches plan to let staff go in 2023 than in 2022.
Around 40 percent of churches appear to be targeting an increase of 4-5 percent in their 2023 budget for salaries, benefits, total payroll, and a cost-of-living-adjustment (COLA). Another 20 percent of congregations are planning for a slightly higher increase in the 5-7 percent range.
As we mentioned in our 2022 State of Church Compensation webinar, churches are not alone in their inability to keep pace with inflation—most businesses are aiming for a payroll increase in the same ballpark, depending on which survey you consult. Learn more about labor market pressures in 2022 and the latest inflation and wage data in the two articles below.
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