Dealing with Tough Financial Times: Money, Morale & Momentum, Part 2

The next 3 points from Mark Driscoll’s advice on coping with the recession —

4. Fairness

When financial cuts need to be made, don’t subscribe to fairness and make cuts across the board and across all ministries and staff members.

Instead, fund your core ministries and key leaders first and best.

One of the great errors that ministries make in hard times is imposing cuts across the board. This is unwise because cutting core ministries will compromise the health and viability of the church. Some ministries are supplemental—not primary—ministries. Secondary and supplemental ministries need to be cut back or even eliminated before there are deep cuts to primary ministries.

5. Terminations

It is wiser, if needed, to fire a few people than to cut everyone a little bit, because that hurts and discourages the best performers and carries the worst performers. If terminations are necessary, it is important to do so sooner rather than later. This allows you to give generous severance to those who are losing their jobs in hopes of giving them time to find replacement work. If you wait too long to cut staff, you will not have the money to pay them decent severance, which is unkind and really hurts morale. Additionally, just because there are terminations does not make it wrong to also give some people strategic raises. If some people are doing an amazing job and carrying more responsibility than ever, they may still merit a raise, even in tough times.

6. Hiring

Financial downturns are a great time to hire strategic senior-level leaders because the market for them has shrunk and they are available.

Many ministries are overly concerned with keeping everyone they have on staff, and in so doing they can easily overlook the opportunity that is before them to hire world-class staff members that could increase the bar of excellence in the ministry.

As to point no. 4, amen. When we go through tough times here, there is always a conflict-adverse ministry leader who wants to prorate and avoid making tough choices. But the reality is that–

• Some ministries can’t stand any cut. They have to either be fully funded or else eliminated.
• Some ministries are more missional than others. Why reduce the wages you pay missionaries just to fund a children’s Easter egg hunt?
• Some ministries are more essential than others. It’s not like you can prorate the power bill.

And tough choices force us to set priorities, which forces us to ask what is really important to God’s work through our church. Avoiding the question only hurts mission, whereas facing the issues squarely could prepare our congregation for years of much more effective ministry.

Point no. 5 is the one that really struck me. Back in the recession of 1983, which hit Tuscaloosa very hard, I had friends get laid off. The fortunate ones were the one laid off the earliest — they received decent severance and were able to go job hunting before the market was flooded with other laid off people.

If you do reduce salaries, I think the best approach is to promise to try to repay the lost pay in future years — treating the reduction as a deferral. I mean, most ministers live at the limit of their pay. Reductions hurt severely. Be as considerate and helpful as possible.

Moreover, the staff sees the budget and revenue figures. They know when things are so bad that a termination is inevitable. Therefore, if a lay off can’t be avoided, it really is kinder to announce it sooner rather than later — accompanied with generous severance.

On the other hand, in many churches, I’d disagree with Driscoll about laying off ministers in preference to reducing salaries. If a church has a preacher and youth minister, and you need to find a $5,000 savings, you’d be crazy to lay off a minister rather than reducing pay. I mean, in such a case, if you put the choice to the ministers, they’d surely prefer a pay cut to a lay off. And while you may well be able to pay back the lost salary the next year, you may not be able to replace your laid off minister. Good ministers are hard to find.

By the way, while in some industries 2 weeks severance is customary, among ministers, severance should be in the range of two months to even six months pay, when possible, depending on years of service. It should not depend on how quickly you hire a replacement. You see, most ministers in the Churches of Christ cannot find work unless they leave town — and this is a slow and expensive process.

Moreover, you should try to time any ministerial terminations with the school year in mind. Don’t lay off a minister with school-age children in February with one month’s severance. If at all possible, arrange things so the minister can allow his children to finish out the school year — especially if his children are in private school.

Also, remember that church health insurance is exempt from COBRA, so that in most states ministers cannot elect continuation coverage. This can be devastating. Make some sort of arrangement to continue health coverage while he or she searches for a new job.

In short, even when laying off a minister, we are called to be compassionate people. I’d far rather cancel a short-term mission trip or an Easter egg hunt than leave a laid-off minister with inadequate severance. Good stewardship never means being tough on former employees just to save a buck.