Government annually spends billions too much on external experts: study

The government and companies in the Netherlands are spending billions of euros too much on hiring external experts, market researcher Intelligence Group reported. This happens because organizations base their fees for external experts on their permanent employees' salary scale instead of basing it on the actual market prices for self-employed people or seconded employees.

They often use a fixed increase factor of 1,6 to 2 times the salary of a comparable permanent employee. Because salaries usually rise and rarely drop, the fees for external experts also automatically rise due to the system that is used, while fees are stagnating at this moment in the market or even dropping.

"Linking hiring rates to wage and job structures is undesirable and inefficient. It removes the competitive incentive from the market and causes hundreds of large employers to pay the equivalent of expensive cappuccino too much per hour hired." Said CEO Geert-Jan Waasdorp of Intelligence Group. "For the government alone, this results in spending 200 million euros too much yearly, or 10,50 euros per declared hour."

If no changes are made, the extra costs for the government could reach around a billion euros. Waasdorp thinks that hiring rates should be directly disconnected from the wage and job structures and that market-based rates should be used.

The new coalition agreements state that the Cabinet wants to cut back on the civil service and the hiring of external staff by 22 percent. However, paying market-based rates is not yet part of the intended austerity measures.