STAFFING & The Vanderbloemen Search Group and Leadership Network Method for Analyzing the Cost Efficiency of Your Staff (FTE, full-time staff equivalency)

by Tim Stevens, Vanderbloemen Associates, 5/30/18.

… Below are three key factors to consider when answering the question, “Are we spending too much on staff?”

1. Percentage of Budget Designated for Staff

…Generally you will hear that your staff expenses (salaries, benefits, training, etc.) should not exceed 50% of your total general operating budget. That is a good rule-of-thumb, but there are several variables that you’ll want to consider, as each situation will be different.

  • Established multi-site churches with several sites often see staff costs as low as 35% to 40% of their overall budget. This is because they can find efficiencies with a central support staff, and if they utilize a video venue model, they don’t have to pay teaching pastors for every location.
  • If you believe in hiring proven leaders who can grow their ministry, you will likely have a higher percentage of your budget going toward staff. High capacity leaders cost more.
  • If most of your hires are internal (hired from within your congregation), you might be able to keep staff costs lower. These staff members might be in a dual-income family (thus reducing costs of benefits), and might be willing to work for far less than the national average due to their connection to the church and belief in the mission.
  • How well you leverage your volunteer base will make a difference in how much you spend for staff. I’ve worked with many churches that have a history of hiring staff way too quickly. Their first impulse is to hire, rather than to organize and equip volunteers. I think that is wasteful, both of the church’s money, but also of the giftedness of the congregation members, many whom would step up and serve if asked…

2. Staff-to-Congregation Ratio

The second benchmark is to look at how many staff you have compared to the size of your congregation (measured by average weekly attendance). Vanderbloemen Search Group and Leadership Network published a joint study of large churches (defined as 500+ in attendance) that took a deep look at salaries and trends in church staffing. That study indicates that the attendance to staff ratio is 76:1. That is, for every 76 persons in average worship attendance, churches have one full-time staff person. Those numbers consist of all staff, including pastors, directors, administrative staff, custodians and others. (It would not include staff devoted to non-church functions like a school).

Other studies have reported similar findings. Paul Alexander, who works with The Unstuck Group, reports that they see the average ratio of churches they consult at 86:1.

How to calculate your ratio:

Example Your Numbers
1. Add the total weekly hours of your part-time staff

(Example: 2 staff x 10 hours (20), 2 staff x 20 hours (40), and 1 at 30 hours would equal 90 hours)

90
2. Divide line #1 by 40 2.25
3. Add total number of full-time staff 6
4. Total Full-Time Equivalents (add lines 2 and 3) 8.25
5. Average weekly attendance (include kids) 950
6. Divide line 5 by line 4 115
7. The result is your attender-to-staff ratio 115:1

If your ratio is higher than 90:1, that means you are more efficient with your staff than the typical church. This might be a good sign, demonstrating a highly efficient team or showing an unusually good usage of volunteers. It also might mean your team is showing stress cracks. If you are in this category, and you have noticed your team is working unusually long hours and finding it difficult to balance family with work, then you probably need to work toward a solution that may involve bringing on additional staff. If you have high turnover, it might mean the expected work level is unsustainable.

If your ratio is lower than 70:1, then you are blessed with more staff than the average church. Start-up churches often have low ratios since they begin with a core of staff (worship, teaching, children, etc.) and initially don’t have any people. Their staff ratio can get closer to the average as the church takes root…

3. Combining These Two Benchmarks

For a deep dive into your numbers, consider both of these benchmarks together. What percentage of budget are you spending on staff and what is your attender-to-staff ratio?

  • If your ratio is low (staff-heavy) AND your percentage is low – you have room to increase salaries. Make sure you are paying your core staff what they are worth. It costs a lot more money to replace a high-performing staff member than it does to keep one. Consider this as you set next years’ salaries.
  • If your ratio is low (staff-heavy) AND your percentage is high – you need to consider reducing staff over time through attrition. You likely have too much staff. If your offerings are okay, you probably don’t need to lay off staff. But every time someone decides to leave, you should consider moving people around and avoid replacing them – that is, until your attendance or offerings increase.
  • If your ratio is high (lean staff) AND your percentage is low – you have room to hire additional staff, and may want to consider doing this for the health of your existing staff. They are likely feeling the stress of long hours and wearing multiple hats. Get them some help!
  • If your ratio is high (lean staff) AND your percentage is high – you likely have limited income and need to work hard to engage and equip your volunteers to help carry the load. Consider getting a copy of my book, Simply Strategic Volunteers, and focus on getting more of your laity engaged in the work of the ministry.

This article provides some broad categories that will hopefully give you some direction. If our team at Vanderbloemen Search Group can be helpful in providing customized consulting for your team, we’d love the opportunity to partner with you.

Read more at … https://www.vanderbloemen.com/blog/cost-efficient-employees-church