Preparing for Change in 2022
by Nathan Artt, on December 2021
Let’s be honest; 2021 was not what most of us expected it to be.
Most of the leaders I spoke with at the beginning of the year looked forward to a speedy ‘recovery’ back to the pre-Covid model with a possible mix of lessons learned during the actual Covid season. Instead, we found ourselves, our churches, our families, and our organizations enduring yet another year of what has become a brand new world: a true post-pandemic reality that bears little semblance to our pre-pandemic existence. Things are truly just not the same, and will likely never be the same again. There is no going “back”.
In short, 2022 will be the first full year of looking ahead into our new future, free of “pre-Covid” comparisons. What happened pre-Covid now matters a lot less.
We have been saying for nearly two years now that Covid has not necessarily created this new reality, as much as it has accelerated it. We were already headed for a labor shortage. We were already headed for a more digitally focused church. Physical attendance was already less frequent from our church-goers. These things were all happening already. The challenge we faced this past year is that 10-20 years of change was condensed into 12 months. It was a lot for any leader to handle.
With that being said, we wanted to share with you some quick thoughts about what we will likely experience in the coming year. Bad news? The weight of change is headed our way. Good news? With change comes opportunities for growth and relevance. While the challenges may not cease, we believe that Jesus’ church will come out of this stronger than ever before. After all, as Kevin Penry so eloquently wrote in a blog earlier this year, we were given certainty in His promise, just not in His process.
We will cover each of these topics in much greater detail at the beginning of the year, but here are a few key points to take away as we look forward to 2022.
We will feel the weight of the Great Resignation
This year the global economy lost 25% of its workforce. Yes, you read that correctly. One out of every four people in the workforce this year quit their job. We are still unclear on how many of those people actually left the workforce versus traded jobs, but the numbers are truly staggering. What we do know is that the majority of the people leaving are in senior leadership or middle management positions. We also know that Gen X and Gen Z are trading current employers for new ones who will offer more flexibility, more time off, and the ability to work from home.
A friend of mine is a lead pastor of a large church in Nashville, TN. In a recent all-staff meeting, he wrote a formula on the board to demonstrate the key issue that he feels he and his staff are facing:
2E = 1/2R
In other words, “We are putting in 2X Effort to see one-half the Results.”
The biggest challenge we have as a church is that we were already paying less than the market in most positions because of the ministerial and eternal aspect of the role. However, as people are working harder and seeing fewer results from their labor (in the traditional model), a large number of church employees are leaving the workforce to make more money, be more present with their families, and to look at their ministry role through the lens of volunteering.
We will send out a more comprehensive analysis of this in January, but here are a few key takeaways:
- You will not replace all of of the FTE’s you are losing
- There will be a major acceleration in the already-existing trend of outsourcing clerical, financial, production, and non-executive positions
- Churches will use more fractional employees and consultants
- New employees will ask for more money and more flexibility/off time
- The most prominent requirement to retain and attract new employees will be flexible hours and work environments
- Consider rolling out changes to your existing employees before you offer it to new ones
New Organizational Strategies, not Additional Programs
Almost every metric we see in the Church is based on attendance. Why? For lead pastors, attendance has always been a leading indicator. Meaning, attendance is a predictive measurement for future engagement, specifically in giving, serving, and small groups.
However, we are seeing more and more that attendance is becoming a lagging indicator. Meaning, where attendance was important because it drove engagement, now we are seeing that engagement is driving attendance.
In order to get people “in here”, we have to get better at reaching people “out there”. Success in engagement will come from a focus on new organizational strategies tailored towards the biggest opportunities. These opportunities will likely be in the form of digital engagement, outreach, more relevant buildings that are used for non-Sunday morning specific activities, etc. However, these are not additional programs to be added to the pre-Covid model or a program run by someone separated from the ‘real ministry’ of Sunday morning. The organization will have to shift towards these things as primary strategies, not additional features.
The Rise of the Executive Leader
The ‘attendance creates engagement’ model relied heavily on the abilities of a communicator. First, the communicator in this model of church creates the draw that made invitations to church easier, which created in-person attendance. Secondly, it was the communicator’s ability of converting attendance into next steps with the people in the room that made so many churches successful in creating engagement. After all, the Church is unique in that it is the only “business” that has a captive audience with its “customer base” 52 times per year. Or at least it was.
A great communicator and a great organizational leader will certainly have some things in common, but make no mistake that they are completely different people. However, that has been hard to delineate in the “captive audience”/event driven model we just described.
We are now in a climate of major change. People are wanting different things from their church. Fewer people are attending in person, or at least less frequently. On top of that, we are experiencing the largest turnover in the labor market in our history with radical changes in our model, new audiences, a lack of volunteers, change in the use of our buildings, change in our finances, new organizational strategies, and more.
I am NOT saying that the communicator is unimportant, or even less important. In fact, let me just say that I still feel very strongly that the communicator’s ability to cast vision and share the gospel is very important. In short, my point is that our Executive Pastor and/or Executive Teams will be more important than ever before in the success of our churches going forward.
Buildings will continue to change
This past year, we saw the largest increase in material and labor costs in history. The average cost of IIA Assembly (most common type of church construction) rose from $233 per SF at the end of 2020 to $281 per SF by October of 2021. That is a 20% increase in construction costs in ten months, which is unprecedented.
Long term interest rates are expected to increase slowly over 2022, but construction costs are likely to continue to increase at a high rate. The labor shortage has affected manufacturing heavily, which will keep the supply chain slow for at least another year. On top of that, the commercial construction industry was already considered to be 150,000 jobs short, a number that will likely double to 300,000 in 2022.
As we’ve written many times before, we believe that it is the role of our buildings that will change, but not their value. This increase in cost will require churches to be more efficient and creative in how they approach projects. Here are a few key predictions/points to consider, and we will follow this up with a more comprehensive piece in January:
- The design-bid-build process will not work for churches, as prices will be continuously changing and it will be important to have pricing exercises on a consistent basis
- Do NOT hire out of town, design-build firms for projects that require a subcontractor base
- We will see more income-producing buildings being planned in 2022
- The project you planned for in 2020 will likely need to be re-evaluated
- Throw out what you think you know about pricing contingencies
- Your financial strategy is more important than ever before, and will require more creativity than ever before
We look forward to facing these challenges and opportunities with you head-on in 2022. Look out for more, expanded content around these principles in the coming months.
If you would like to discuss any of these ideas further, please feel free to reach out to our team. We would love to connect with you.