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Managing overhead in public sector organizations through benchmarking
Article in Public Money & Management · January 2014
DOI: 10.1080/09540962.2014.865929
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Managing overhead in public sector organizations
through benchmarking
Mark Huijben, Arno Geurtsen & Jan van Helden
Published online: 29 Nov 2013.
To cite this article: Mark Huijben, Arno Geurtsen & Jan van Helden (2014) Managing overhead in public sector
organizations through benchmarking, Public Money & Management, 34:1, 27-34, DOI: 10.1080/09540962.2014.865929
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27
Managing overhead in public
sector organizations through
benchmarking
Downloaded by [University of Groningen] at 05:22 30 November 2013
Mark Huijben, Arno Geurtsen and Jan van Helden
Many public sector organizations struggle with the size of their overhead. The current
crisis has forced them to cut costs, but how drastic can these cuts be without losing too
much value? In 2001, we started an overhead benchmarking project in the
Netherlands and by 2012, 1,500 public sector organizations had participated in the
study. This paper shows how benchmarking of overhead costs helps organizations to
understand and properly balance the costs and benefits of their overhead functions.
Keywords: Benchmark; overhead; overhead benchmark; overhead value analysis (OVA).
Overhead is a phenomenon that many people
dislike; it is often associated with the ‘fat’ of an
organization and one of our interviewees
labeled it as ‘self-rising flour’. Nevertheless, it
fulfills an important function, namely steering
and supporting an organization’s primary
processes. Overhead is also an emotionallycharged subject and discussions about the issue
often stir up strong feelings. The notion of too
much overhead aggravates people because it is
associated with a loss of financial resources for
primary processes. Moreover, not everybody
recognizes its added value, while the emotions
of the employees involved in overhead functions
run high every time drastic overhead cuts are
made without a thorough analysis.
Many organizations have problems with
their overhead functions and find the issue
hard to get a grip on. In this respect, there are
a number of recurring questions:
•Which functions can be considered as
overhead?
•What is the size of my overhead relative to
that of comparable organizations?
•Should I expand this or that overhead
department or not?
•Is there still room for cuts?
•How can I determine the optimal size of my
overhead?
There is very little expert literature available
on managing overhead; to date we have located
only one paper on benchmarking overhead
(Goold and Collis, 2005) and that paper
concentrates on the overhead of an
organization’s head office whereas
decentralized overhead can also be extensive.
Most academic work has involved assigning
overhead costs (Rogerson, 1992; Armistead,
1995; Durden and Mak, 1999; van Helden,
2000; Luther and Robson, 2001; McGowan
and Vendrzyk, 2002; MacArthur et al., 2004;
Heitger, 2007).
In this paper we present an unambiguous
method for measuring and comparing public
sector organizations’ overhead. We argue that
measurement and comparison are essential
steps in the management of overhead. After
benchmarking costs and analysing the value of
an organization’s overhead functions, top
management can balance the costs and value of
their overhead.
What makes overhead so difficult to manage?
Overhead is an intangible phenomenon (Allen,
1987; Sanders, 2003; Drury and Tayles, 2005;
Pellicer, 2005; Norfleet, 2007) that is difficult
to grasp for a number of reasons. First, it is
difficult to establish which parts of an
organization can be labeled as overhead. In
addition, overhead differs by organization. The
personnel involved in preparing meals for staff
at a municipality will, for example, be
considered as overhead, whereas in a hospital
the same tasks are regarded as an essential part
of patient care. There is no common definition;
tasks considered to be overhead by one
organization may not be regarded as such by
others. In practice, each individual organization
has its own description of overhead, which
leads to confusion.
Second, overhead is comprised of a large
number of different tasks executed across the
Mark Huijben works
for Berenschot
Consultancy in the
Netherlands.
Arno Geurtsen is
affiliated with the
Free University
Amsterdam, the
Netherlands.
Jan van Helden is
emeritus professor in
management
accounting at the
University of
Groningen, the
Netherlands.
http://dx.doi.org/10.1080/09540962.2014.865929
© 2014 CIPFA
PUBLIC MONEY & MANAGEMENT JANUARY 2014
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28
organization as a whole, partly centrally but
generally also at multiple decentralized
locations. This situation undermines the
transparency of the concept. The definition of
overhead can range from cleaning personnel,
people who make sandwiches in a canteen,
internal mail delivery and an IT helpdesk to
personnel policies, the treasury function and
management.
The third problem is that overhead tasks
change over time. For example, smartphones
did not exist in the 1970s; instead, telexes were
heavily used. Hence, the supporting tasks also
change over the years. A first step in managing
overhead is defining the concept in order to
determine its size within the individual
organization.
What is overhead?
In 2001, we developed the first draft of the
definition of overhead functions, based on our
knowledge of public sector organizations. This
draft was presented to a representative group
of controllers of Dutch municipalities and
welfare organizations. We then further
developed our definition in group sessions.
Afterwards, we asked about 25% of those
municipalities to fill in the forms we had
developed for measuring overhead. We then
further refined our definition.
The academic literature provides two basic
definitions of overhead: direct versus indirect
costs (overhead); and primary versus secondary
activities (overhead). Although a fundamentally
different definition does not need to be added,
there is a need for clarification.
The first definition, the distinction between
direct and indirect costs, is not very clear,
because the question of which costs are direct
or indirect largely depends on an organization’s
structure and administrative system. Some
organizations measure the use of particular
support services by primary services, while
others allocate the costs of those support services
to the primary services. In the first case, the
costs of support services are direct costs, while
in the latter case they are indirect costs. So,
because organizations differ largely in what
they consider to be indirect costs, this hinders
a proper comparison.
The second definition, the distinction
between primary and secondary services or
activities, is a generally suitable point of
departure. A proper comparison is, however,
only possible if this definition is specified in
sufficient detail. Moreover, it should take into
account the differences between sectors. It is
from this perspective that we present our
PUBLIC MONEY & MANAGEMENT JANUARY 2014
definition of overhead (Huijben and Geurtsen,
2008).
We define overhead as the whole of
functions aimed at steering and supporting
employees in the primary process. Therefore,
overhead functions indirectly contribute to the
organization’s functioning. In this respect we
distinguish between generic overhead and sectorspecific overhead. Generic overhead is common
in every sector, while the nature of sectorspecific overhead differs by sector. This
distinction is important in order to adequately
compare the overhead of organizations in
different sectors.
Generic overhead
The concept of generic overhead typically
includes functions that are common in all
sectors. Our definition includes all centralized
and decentralized departments dealing with
the following functions: board, management,
and secretarial support; personnel affairs/
human resources (HR); IT; finance and control;
communication; legal affairs; facility services,
for example security, maintenance, delivery of
internal mail, and reception desk services. These
activities are only considered to be overhead
insofar as they do not form part of the
organization’s primary tasks. This applies to
some of the functions mentioned here, as the
following examples illustrate:
We characterize the restaurant in a municipal
organization as ‘overhead’ because it serves the
employees in the primary process rather than the
citizens.
The restaurant in a nursing home is considered
mainly a ‘primary process’ because it exists to
serve the residents of this institution. It only
serves the organization’s employees to a limited
degree, so it can only partly be characterized as
overhead.
Specific overhead
This concept relates to the particularities of a
certain sector, in the sense that overhead
concerns those specific functions that fit the
basic definition but only apply to one particular
sector. For example, universities need ‘student
support’ (which includes sports instructors and
psychologists for students) and ‘educational
administration’ functions. The work of a
courtroom messenger may serve as another
example—the messenger supports the primary
process of the courtroom. This type of work is
not relevant in other sectors, so it is a sectorspecific overhead function.
© 2014 CIPFA
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Approach and methods of data collection
Our approach to controlling overhead has five
steps:
1. Defining the overhead: what should be
considered to be overhead and what should
not?
2. Measuring the overhead: what is the amount
of overhead in an organization in terms of
full-time units (FTUs) and costs?
3. Benchmarking the overhead’s size: what is the
size of an organization’s overhead relative to
that of organizations in the same sector?
4. Cost-benefit analysis for overhead functions.
This analysis is based on the benchmark and
additional research focused on deviations
from the benchmark. The central question
is to what extent are the deviations are
justified by the value of these functions? We
deliberately do not start from a pre-defined
definition of overhead value, because
relevant dimensions may differ among
organizations. For example, one
organization may prefer a sober office to a
more luxurious one (to show that they do
not waste money), while another one may
want an image that reflects wealth and
success. Another example of a dimension
might be the proximity or distance of the
organization’s location relative to that of
certain other organizations. So, the
measurement of overhead value takes place
after the relevant dimensions have been
mapped out in consultation with the
organization.
5. Taking concrete measures to find a better balance
between the costs and benefits of the
overhead functions. This often requires
adjusting the service provision level,
improving the way in which these services
are produced and rearranging the overhead
functions.
Going through these steps will clarify which
tasks in an organization’s overhead deviate
from other organizations and why. The
benchmark indicates whether follow-up
research would be useful and what it should
focus on. The additional research in step 4 is
based on existing methods, for example
overhead value analysis (Neuman, 1975) and
activity based costing (Kaplan and Bruns, 1987).
Steps 1 and 2 are based on desk research,
literature reviews and feedback from
practitioners about preliminary definitions of
overhead and overhead functions. Step 3, the
overhead benchmark, is based on surveys of
organizations in various sectors. After the
© 2014 CIPFA
overhead benchmark has been determined,
more indepth case studies for selected
organizations are carried out in order to
elaborate Step 4, the cost-benefit analysis of
overhead functions, and Step 5, the
consideration of actions to improve the balance
between the costs and benefits of overhead
functions. These studies are based on interviews
with managers from both overhead and primary
process departments, as well as financial
documents pertaining to the various overhead
functions.
Measuring overhead
Overhead is measured in FTUs. The number
of FTUs used to execute overhead tasks is
divided by the total number of FTUs in the
organization. Although there are other possible
denominators, our research has shown that the
total number of FTUs in an organization is the
main cost driver of the overhead workload.
Moreover, FTUs can be measured relatively
unambiguously in comparison with other
variables, such as costs. In addition to the
number of overhead FTUs, the following costs
are listed: salary costs of overhead personnel;
costs of outsourcing overhead activities and
hiring personnel; material costs of overhead
functions; and facility costs. In order to map
out an organization’s total overhead, these
costs are also expressed per organizational
FTU.
An alternative for the total amount of FTUs
of an organization is the amount of FTUs in the
primary process. This denominator, however,
has two disadvantages. First, in addition to
primary functions, overhead functions will also
generate work in the sphere of overhead. For
example, a human resources officer will need
IT support, a workplace, a restaurant, etc.
Second, this denominator is more difficult to
communicate to the people in the organization,
since it is dependent on the amount of overhead.
Benchmarking overhead
Benchmarking an organization’s overhead
means that one organization’s overhead data
are compared data collected from other
organizations in the same sector. This enables
us to determine the size of an organization’s
overhead compared to that of organizations in
the same sector or in other sectors. Since 2001,
we have developed a database about the
overhead size in more than 1,500 organizations
in the Netherlands. Figure 1 shows that there
are considerable differences in the amount of
overhead among the sectors, of which 25 (of a
total of 32) belong to the public and non-profit
PUBLIC MONEY & MANAGEMENT JANUARY 2014
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sectors. Ministries and municipalities have, for
example, a relatively high overhead, while
health care and educational organizations are
characterized by a relatively low overhead. In
all sectors we disregarded the sector-specific
overhead, so the large differences between the
sectors were not caused by differences in the
definition. Furthermore, figure 2 indicates that
substantial variations in overhead size also exist
between organizations in the same sector: the
maximum overhead in a sector is often twice as
high as the minimum overhead.
Explanations for the differences between
sectors and organizations within the same
sector
We conducted a series of structured interviews
with the organizations included in the research
in order to find out what influenced the number
of overhead FTUs. Relevant factors which affect
the amount of overhead are:
1. The sector to which the organization belongs.
Every branch has its specific characteristics
that explain the differences in the amounts
of overhead, such as specific rules and laws,
a specific approach to accountability or a
specific IT infrastructure. Courts, for
example, need relatively high levels of
security and huge archives. But, on the other
hand, the financial accountability of Dutch
courts is simple, resulting in small finance
departments. Local governments have
relatively complex accountability obligations
due to a diversity of laws and the political
dimension, resulting in large finance
departments.
2. The control philosophy (the way of steering and
controlling the organization). Lewy (1992)
distinguishes between ‘tight control’ and
‘loose control’. Both control styles influence
the number of FTUs deployed in the
management of an organization. In a tight
control situation, the organization pays a lot
of attention to supervision and monitoring,
whereas an organization with loose control
pays less attention to these issues.
3. The overhead departments’ service provision levels.
Some organizations have opted for a
minimum provision of support and others
for more extensive facilities. There are
organizations where even board members
do not have their own offices, where there is
no restaurant and where the secretarial staff
only performs standard tasks. In other
organizations, however, all managers have
luxurious offices, the employees can have
their lunch in the restaurant for free and
PUBLIC MONEY & MANAGEMENT JANUARY 2014
there is a secretarial staff to whom managers
can dictate letters and notes from their cars.
In one organization, any employee can order
goods from any supplier, whereas another
has strict procedures in this respect.
4. The historical development of overhead and the
prevailing culture. Organizations get used to
a certain type of overhead. If it is normal that
each manager has a secretary and an assistant
manager, these matters often become highly
sensitive and are not easily discussed. There
are also organizations which have retained
the traditional overhead functions (a library,
an office for text processing) that other
companies have abandoned. For most
organizations these kinds of functions are no
longer strictly necessary.
5. The organization of overhead. There is no
denying that some organizations are far more
efficient than others. As overhead tasks are
more dispersed across various departments,
a higher level of task distribution is required.
In particular, the co-ordination between
centralized and decentralized overhead
departments is often insufficient. As a result,
the same tasks are duplicated and much
time is lost on consultations. In addition, we
see that the decentralized managers’
discontent regarding these issues leads to
the decentralized appointment of people for
staff functions with the aim of regaining
‘control’. This is, of course, undesirable for
the organization as a whole.
6. The affordability of overhead plays an important
role. Organizations that can afford a large
overhead will not be inclined to reduce the
amount of overhead personnel.
Organizations that cannot afford overhead,
however, will try to reduce it. Examples of
‘rich’ organizations in the Netherlands are
housing corporations and ministries. It was
striking to see how surprised the top
managers of these organizations were when
they were confronted with their high
overhead costs. On the other hand, we
analysed the overhead of a large welfare
organization that was forced to reduce its
overhead because the local government did
not want ‘to spend money on overhead’.
However, our research showed that the
overhead costs were already low and further
funding cuts bankrupted the welfare
organization.
We also investigated whether the size of the
organization measured in FTUs is a significant
driver for overhead variation. Managers and
officials in the public sector often believe that a
© 2014 CIPFA
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31
larger organization leads to lower overhead
costs per FTU, while economic theory supposes
a U-form of the overhead costs per FTU as a
function of organizational size. However, we
found that this relationship is basically linear:
the larger the number of FTUs, the larger an
organization’s overhead. In contrast with the
expectations, economies of scale hardly occur
(as figure 3 illustrates). A large municipality
has, for instance, on average about the same
percentage of overhead as a small municipality
with 150 officials. Only very small municipalities
have relatively higher overheads.
The huge differences in the amount of
overhead among the organizations that we
observed (see figures 1 and 2) can only partly
be explained by rational arguments (factors 1,
2 and 3 above). The irrational factors 4 and 6
(and partly also 5) reveal why organizations do
not cut their overhead even when it is clearly
possible. To illustrate this we present some
interview quotations. ‘Overhead is not an issue
here,’ said a human resources director of a law
office, when we confronted him with his large
number of secretaries (25% of the total FTU).
‘We think in billions here’ indicated a board
member of a financial institution, when we
made clear that he could save millions on
overhead.
Cost-benefit analysis for overhead functions
Table 1 presents a cost-benefit analysis for
overhead functions. The table distinguishes
between two variables that determine the search
process for an improved combination of the
costs and benefits of overhead functions: the
service level and the cost level. For both
variables, three value categories are
distinguished (i.e., low, medium and high),
which results in nine value combinations. These
value combinations are presented in the table
cells numbered 1 through 9. Four types of
value combinations emerge from the table:
•A balanced combination of costs and benefits
(cells 1, 5 and 9).
•An efficient combination of costs and benefits
(cells 4 and 8) in which the service level is
relatively higher than the cost level.
•An inefficient combination of costs and benefits
(cells 2 and 6) in which the service level is
relatively lower than the cost level.
•An unlikely combination of costs and benefits
(cells 3 and 7) in which the service level is
substantially higher or lower than the cost
level.
Depending on where in the table an
© 2014 CIPFA
Figure 1. Amount of overhead.
Figure 2. Variation in overhead size (minimum—maximum).
organization’s costs and benefits of overhead
functions lies, two types of decisions can be
considered. First, if an organization holds an
inefficient position, it has to consider either
cost reduction actions or benefit improvement
actions, which result in: starting in cell 2, a
move from 2 to 1 (cost reduction) or from 2 to
5 (benefit improvement); and starting from cell
6, a move from 6 to 5 (cost reduction) or from
6 to 9 (benefit improvement). Second, an
organization can move from one to another
balanced position. These are diagonal moves
between cells 1, 5 and 9.
The cost level is based on the benchmark
and the service level is based on an Overhead
Value Analysis (OVA). The service level should
fit the demands of the organization (managers
and employees). Therefore, an important part
of conducting the OVA is interviewing suppliers
and demanders. An OVA includes:
1. Mapping out the tasks of the overhead
functions in a detailed manner and
calculating the staff and costs per task.
PUBLIC MONEY & MANAGEMENT JANUARY 2014
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Figure 3. Economies of scale in overhead.
2. Determining the value of the overhead tasks
on the basis of interviews with the internal
purchasers and providers. Here the focus is
on the internal purchasers’ appraisal, as well
as the providers’ and purchasers’ perception
of the value of the overhead tasks for the
organization as a whole. This step may
concern issues such as unburdening the
employees in the primary process, legal
requirements, contributing to the
organization’s image or other organizational
objectives (Huijben, 2011).
3. On the basis of steps 1 and 2, the
organization’s board is subsequently able to
make a comparison between overhead costs
on one hand and its value on the other.
The following case study illustrates how a
particular organization has dealt with a partly
inappropriate balance between the costs and
benefits of its overhead functions.
Case study: Centre for Educational Service Provision
(CESP)
CESP primarily provides supervisory and
training services to professionals working in
various types of schools. Formerly, CESP was
part of the Rotterdam local government
organization, but it became an autonomous
entity in 2002 and as such has since received
both subsidies and project-related payments
for its services. In 2009, CESP’s top management
approached one of the authors for advice about
possible interventions in the organization’s
overhead functions. At that time, CESP
employed about 200 people, all working at one
location.
Because CESP was in transition from a
governmental to a market organization, it
preferred to benchmark its overheads with
private sector service organizations, in
particular with the ‘research, engineering, and
architecture’ and ‘financial services’ sectors,
whose activities were considered to be similar
to CESP’s operations. After consulting the
organization’s general director, the financial
director and an internal consultant, three
overhead functions were selected for further
analysis, mainly because their costs and benefits
seemed not to be balanced:
•Management (with an overhead of 50% above
the sector average).
•Knowledge management (because this
function had been criticized and in many
organizations this function was integrated
into the primary process).
•IT (the problem here was that this service was
expected to support a relatively large number
of part-time functions, while its overhead
costs were 25% below the sector average).
Each of these functions is further discussed
below.
CESP had three management layers: a
general director, functional and market-related
directors, and unit managers (also called team
co-ordinators). During our interviews,
employees complained about the large number
of managers and an unclear division of
responsibilities among the three management
layers. Managers also had responsibilities that
were part of advisors’ responsibilities in other
consultancy organizations, such as project
planning. Therefore, CESP wanted to reduce
the number of management layers in
combination with the number of managers and
transfer some management functions to the
advisors. This required both reducing and
redesigning overhead functions.
The knowledge managers expressed their
Table 1. Cost-benefit analysis of overhead functions.
Cost level (based on the sector benchmark)
Service level
(based on an
OVA)
PUBLIC MONEY & MANAGEMENT JANUARY 2014
Low
Medium
High
Low
Medium
High
1. Balance
4. Efficient
7. Unlikely
2. Inefficient
5. Balance
8. Efficient
3.Unlikely
6. Inefficient
9. Balance
© 2014 CIPFA
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33
way of working in two policy documents. In
order to arrive at this, they organized meetings
with managers and experts within CESP. So,
although there were various safeguards to
ensure a good relationship between the
knowledge managers and their internal clients,
the knowledge managers’ work did not receive
much appreciation from these clients. The
extreme option of abolishing knowledge
management as a separate overhead function
and integrating it into the primary process was
not supported. The CESP board ultimately
decided to continue with the current way of
working and to reduce the number of
knowledge managers from three to two FTUs.
The IT function involved co-operation
between internal IT employees and an external
party. There was no clear policy indicating
which IT facilities were available to the
employees. Neither was there an organized
form of consultation between line managers
and IT employees regarding this issue. As a
result, it was difficult for the external party and
the internal IT staff members to do their work.
This resulted from lack of support and the
unclear policy, but was also due to the
demanding attitude the advisors had when
dealing with the IT employees. A provider–
user interface was seen as a more desirable
approach, because it offered clarity to the
supplier and the user about the preferred/
expected level of the service provision. The IT
department developed project and investment
plans to reach this new service level.
Further illustrations
Some brief examples from other case studies
may further illustrate cost-benefit analysis of
overhead functions. A supervising institution
was faced with a relatively high cost level in its
finance department and reduced its size in
combination with better attuning its information
provision to the line managers’ need for
information. The large size of a high council of
state’s personnel department was not changed
because it could be clearly explained by the fact
that the organization facilitated its own training
courses. However, a child welfare organization
reduced its facility costs by replacing a number
of fixed workplaces with flexible ones.
The main advantage of measuring and
comparing overhead is that discussions can be
based on facts rather than emotions. This allows
the costs and benefits to be weighed: can the
higher costs be justified on the basis of the
service provision or is this impossible? Various
types of answers can be given, as our illustrations
show, ranging from repositioning overhead
© 2014 CIPFA
functions (centralized versus decentralized) and
adjusting the internal demanders’ expectations
about the extent and type of overhead functions
so that they are more realistic about what is
possible.
Reflections and suggestions for further
research
This paper has developed an approach for
mapping out an organization’s overhead in an
unambiguous manner. The objective of
identifying overhead is to make the issue
accessible and manageable. Once the factual
size of the overhead has been established,
management can benchmark the overhead and
use it to determine the extent to which an
organization’s current overhead deviates from
that of other organizations in the same sector.
Based on this comparison, it can decide whether
or not to adjust the overhead. Here, OVA can
be used to diagnose and determine a proper
trade-off between the cost and value of overhead
functions. Deviating from other organizations’
overhead levels does not have to be problematic,
but it should be a deliberate choice.
To what extent does this approach actually
lead to the improvement of an organization’s
decision-making process with respect to
overhead? On one hand, our observations
during the past 10 years indicate that using this
approach concentrates the overhead discussion
more on factual figures and the causes of
overhead cost differences compared to other
organizations. An increasing number of
organizations currently base their decisions on
the benchmark figures, and many organizations
have embedded the approach developed here
into their planning and control cycle. In 2009,
for example, all Dutch courts followed this
approach. This also applies to many
municipalities; since 2006, the Dutch
Municipalities Association (Vereniging
Nederlandse Gemeenten) has awarded our
overhead benchmark a quality mark and has
actively brought it to the attention of all
municipalities. Moreover, the Dutch central
government has used our method to determine
its output funding of all 14 universities since
2011.
On the other hand, we have observed a
kind of asymmetry in the adoption of our
overhead management approach. All
organizations that use this approach are
interested in unambiguously defining their
overhead, measuring their overhead costs and
benchmarking figures about those costs.
However, only a minority of these organizations
are using OVA. In the period before the
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financial crisis in 2008, we frequently found
that if organizations generally had lower
overhead costs than their sector average, they
considered that to be a confirmation of good
practice and were not inclined to take corrective
actions. However, if organizations had higher
overhead costs than their sector average, many
of them produced arguments to justify their
existing practices. Consequently, overhead
benchmarking offered a path for defensive
behavior, as was also observed in a more general
sense regarding public sector benchmarking
operations (Bowerman and Ball, 2000;
Llewellyn and Northcott, 2005; Tillema, 2010).
Due to the financial crisis, we have also
recently seen an extremely contrasted reaction
pattern in which financial stress leads
organizations to use overhead benchmarking
cost figures (in the form of best-in-class figures)
as targets for their future overhead cost levels,
without seriously looking at potential losses in
value due to cost reductions. This pattern also
differs between sectors: surprisingly, sectors
with a low average generic overhead were
more inclined to look at possible actions to cut
costs than sectors with a high overhead. This
could be due to differences in financial pressure.
For example, the financial pressure on sectors
such as care and primary education is high;
Dutch media and politics usually dishonestly
criticize the ‘huge amount of overhead’ in these
sectors. We observed that this criticism and
financial pressure leads these organizations to
try to cut costs, even when this is no longer
possible.
Further research should question the extent
to which international differences determine
the size of overhead. In addition, further study
is required to obtain more insight into the large
differences that exist in the management and
design of overhead functions.
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