Lay Off the Layoffs

The Federal Reserve projects unemployment may hit 8.8 percent by the end of the year. But at least one church leader says churches have a biblical responsibility to exhaust all options to reduce operating budgets before resorting to the same job-cutting tactics used by companies, agencies, and ministries during the first quarter of 2009, which left millions of Americans out of work.

“Given the value of our staff and our employees, and how we need to model what it really means to be in community and be in biblical relationships, we have to turn over every rock to reduce our operating expenses before we take the hard steps of letting people go,” says Paul Clark, the executive pastor of Fairhaven Church in Dayton, Ohio. “It’s biblical. We owe it to people to make the best efforts to preserve their jobs, their roles in the church. When we hire them, we make a commitment to maintain biblical relationships and good working relationships.”

That’s not an easy task, Clark concedes. Your Church magazine estimates personnel costs use up nearly half of church operating budgets.

At Fairhaven, personnel costs take up 56 percent. With a deep recession underway, it’s natural for such a large expenditure to draw immediate scrutiny.

But releasing workers doesn’t always deliver the expected savings; meantime, the move pushes homes into turmoil, and rattles the morale of those left behind. Clark learned these lessons firsthand during a 14-year stint with General Electric Company early in his career.

“We have to set the standard for how we treat our people,” he says. “There are lots of creative ways to reduce personnel costs without laying people off.”

Clark recommends the following:

Consider reducing hours instead of personnel.
Freeze existing salaries.
Don’t fill vacant positions.
Ask employees to take an unpaid furlough for an agreed-upon length of time during a period when ministry is slow.
Move employees from jobs slated for downsizing to open positions.
Use job sharing (allow two part-time employees to share a full-time position.)
“Lend” your employees out (share an employee with another church as a means of cutting costs.)
Restrict overtime.

Fairhaven, a Christian and Missionary Alliance church, used some of these strategies in early 2008, when indicators suggested a tough year ahead. It also educated staff and volunteers on energy use, which lowered utility bills by over 30 percent, and renegotiated leases on office equipment, which netted better prices and newer machinery. The changes shaved $180,000 from the operating budget.

So far this year, the church sees signs of hope: Giving for an $8 million capital campaign remains on track, Clark says, and January collections for the operating budget outpaced collections from a year ago.