Flight of management talent threat to public sector as influx dries up

Blog, 18 February 2014

In 2015, the Dutch government plans to further cut salaries in the public sector. This tightening of an existing act covering standards for remuneration (WNT) sets the maximum salary for senior officials in the public and semi-public sector at an amount equivalent to that of government ministers, or €144,000. That is considerably less than the present standard of €187,000. This is the Dutch cabinet's attempt to address the public's desire to have the excessive pay of directors curbed. But is this the right response?

By international standards, the Netherlands has a public sector that functions very well. The leadership that has managed to achieve this deserves more appreciation than this tightening of the WNT would suggest. The sensational news stories about extremely high salaries are not representative of the moderate salaries paid on average in the public sector.

Moreover, limiting incomes in the public and semi-public sector was only one part of the advice from the Dijkstal Committee from 2004 that set all this in motion. Another important provision, which never came to fruition, was to simultaneously increase ministerial salaries by 50% so that they would remain competitive.

Public and semi-public organisations that have to compete with corporations on the job market are already having trouble attracting and retaining talent due to the higher salary differentials. Besides that, the influx of senior management may well dry up even further. A tightening of the WNT could easily stand in the way of the desire for a smaller, more efficient public sector. We believe that this development could have a negative impact on the quality of future leadership.

Mattijs Kropholler
Managing Partner
Maes & Lunau Executive Search
Amsteldijk 194
1079 LK  Amsterdam

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