Ongoing benchmark: Overhead Cost Benchmark service sector

Find out more about our benchmark in the services sectors (1) Engineering and Construction, (2) Information Technology and (3) Insurance and Financial Services and subscribe now to participate.

What is a reasonable balance between size, volume and the cost of the primary processes compared to those of the overhead? How do I decide on investing, or on the contrary, cutting costs in the various departments?

 It is crucial for organisations to optimise their overheads and indirect business functions to achieve the maximum benefit towards the primary service functions. Too much overhead in an organisation can lead to bureaucracy, high costs and ambiguous business processes. Too little overhead can lead to inefficiencies caused by insufficient support to the primary service functions.

 Our benchmark will help you answer those questions. We compare the size of the overhead of service companies in South Africa, such as audit, tax and accountancy firms; banks; engineering consultants; financial services providers, amongst others.

 Berenschot has executed benchmark surveys for over 1.500 organisations in over 25 sectors. Therefore, we are able to not only compare organisations within sectors, but also amongst the various sectors. 

Objectives of the benchmark research:

  1. Insight in the size of the overhead and indirect business functions in your organisation; overhead structure and costs.
  2. Insight in key factors that contribute to the optimisation of overhead.
  3. Recommendations on optimisation of overhead design, structure and cost.

 Research methods:

  • Quantitative benchmark survey
  • Interviews with participating companies

 What value will your participation result in and what is your investment?

By participating in this benchmark research, you will receive a comprehensive report with specific benchmark information and findings concerning the volume, size and structure of the overhead in your organisation. The report offers an objective assessment that can be used as a basis for restructuring your overhead and indirect business functions. It is a key tool that will support discussions on optimisation of overhead with stakeholders of your organisation.

The report also includes a number of ‘best practices’ from your sector. Our experience learns that benchmarking results have proven invaluable in decision making processes related to cost cutting, outsourcing, budget planning and the development of shared service centres.

 Definition of overhead

To be able to ‘compare apples with apples’ when looking at companies’ overhead, one needs an universal definition of ‘overhead’. When we started our research on overhead in The Netherlands in 2003, we introduced a clear definition of ‘the overhead’. This definition is now leading in The Netherlands: one of the largest economies in Europe.

 We define the following high-level categories within a company as ‘the overhead’:

1.         Management and management support

2.         Human Resource Management

3.         Finance and Control

4.         IT

5.         Marketing and communication

6.         Legal

7.         Facility management

Our definition provides a detailed assessment  of all mentioned categories, as well as a detailed description of corresponding functions. We also take into account roles that are in support of the primary process, but also directly add value to it. In that situation, we calculate a percentage of a specific role as overhead.

 In our vision, the overhead needs to be in balance with the primary process . Therefore, we express the size of the overhead (and the costs) as a percentage of the total organization. In addition, we use FTE as the main indicator for overhead, as this captures the work load of most overhead functions as well.

 When it comes to overhead costs, we include:

  • Salary and costs to company of overhead functions
  • Costs of outsourcing and temporary labour
  • Office lease costs
  • ICT costs
  • Other material costs of the overhead and indirect functions.

Beside this, the research will also look into the balance between centralised and decentralised overhead functions and the volume, size and costs of the primary service functions.

We compare your organisation’s findings with the average of the reference group, consisting of companies of a similar size and similar service offering. You will receive a clear and comprehensive report which indicates the deviations of your company from the industry average. Before producing your company report, we have a discussion with you concerning the results and the possible reasons and clarifications behind the deviations from the industry average.

 Previous clients indicated that the report and benchmark proven to be key and invaluable in decision making processes related to cost cutting, outsourcing, budget planning and the development of shared service centres.

 Your investment

The cost of participating in the Overhead Cost Benchmark in the services industry is R25,000 (excl. VAT).

You will receive a company specific report on the volume, size and structure of your overhead as explained above. We will also organise a kick off meeting with your organisation, discuss preliminary findings with you and present the final results of the benchmark research. Last but not least, we will guide you through the process of the various elements of the benchmark and a helpdesk will be available to assist you with your questions.

 We anticipate that your participation will involve the following time dedication from your organisation:

8 hours for completion of the questionnaire

4 hours for preparation and kick off meeting

2 hours to discuss preliminary research findings

2 hours for final presentation of results at your company

 Confidentiality and anonymity guaranteed

We process your company information confidentially, meaning that we will not disclose your company information to any party except to yourself and we will not publish, nor make any company information publicly available. Only you will have access to your company findings. No other participants or any other external person will be able to access this information. 


The service industry benchmark is currently open for registration for companies in the services sectors Engineering and Construction, Information Technology and Insurance and Financial Services.