Determining an appropriate rate for an external professional is often a challenging decision an organisation must make. In the search for a market‑conform hourly rate, organisations often turn to a benchmark. This makes sense, as a benchmark can be a useful tool for gaining control over costs and ensuring a fair price is paid. However, blindly relying on an average rate can lead to inefficiency and missing out on top talent. There are clear pros and cons to benchmarking hiring rates.
What do we mean by ‘benchmark’?
A benchmark is a reference point: the typical rate for a role or profile within a given period and region, derived from multiple sources (publications, platforms, internal data). In the Netherlands, regular rate and market updates are published, such as the Talent Monitor from Intelligence Group & HeadFirst, industry‑ or platform‑specific tools (e.g. Planet Interim’s rate benchmark), and sector benchmarks in, for example, healthcare (Intrakoop PNIL‑benchmark). Government publications also establish reference points, such as ‘market‑conformity’ checks or guidelines with hourly rate indications per pay scale or job category.
When does benchmarking make sense?
Benchmarking is particularly useful as a starting point. It gives organisations insight into what is common in the market. It provides direction based on data, but you must add context such as the attractiveness of the hiring company, location, contractual form, required seniority, and the complexity and duration of the project.
Benchmarks help make quick estimates, especially useful for business cases or decisions on annual indexations.
In addition, benchmarking can support compliance with hiring policy. Under the Dutch Waadi legislation, the principle of equal pay applies to temporary agency workers: they are entitled to at least the same basic employment conditions (including remuneration) as employees in comparable positions at the hiring organisation. By using up‑to‑date benchmarks and comparing them against your own collective labour agreement (CAO), you can demonstrate that the applied hiring rates are in line with this requirement, thereby avoiding the risk of claims or sanctions. The new ABU/NBBU collective agreement in the Netherlands reinforces this further by, as of 1 January, adopting ‘equivalent’ pay as the standard.
When does benchmarking become misleading?
This is where the ‘cons’ begin. A benchmark is an average, and an average never tells the whole story. Blindly following a benchmark leads to inefficiency because it does not account for crucial contextual factors. Below are some aspects that determine the true value of a professional, which are often overlooked in a benchmark:
- Attractiveness of the assignment and the company: An innovative company with an appealing project and a positive working environment may be able to negotiate a lower rate than a less attractive client.
- Location: The location of the work matters. Rates in the Randstad region are generally higher than in rural areas.
- Specific knowledge and experience of the professional: A benchmark does not capture rare skills, specialist knowledge or the unique experience that a professional may (or may not) bring. These elements can justify a higher or lower rate.
- Duration and scope of the assignment: The nature of the work, its complexity, and the length of the assignment all play a role. Long, stable projects may result in a lower hourly rate, whereas short, complex projects may warrant a higher fee.
Conclusion: use benchmarking as a compass, not a cage.
Benchmarking hiring rates is a valuable tool for gaining an initial impression of the market, but it should never be the sole basis for decision‑making. Use a benchmark to create a solid foundation and direction, but always consider the unique context of the assignment and the professional. Look at your company’s attractiveness, the location of the work and, above all, the specific knowledge and experience the professional brings. A smart hiring strategy is one that looks beyond the numbers and focuses on creating the best long‑term match between assignment and professionals
