In another article ChatGPT generated a proposal on how to implement, maintain and innovate a ServiceNow Platform. In this article you can find the average rates that were used by ChatGPT for that article per role, differentiating on seniority/experience and sourcing model.

DISCLAIMER: the figures herein are indications. actual figures are subject to variations (up and down) per company/situation/volume.

Not everybody uses the same definitions, i use the following:

  • In the proposal market standard roles were used, that are common in DevSecOps organizations (for a description of each role: see Scrum or SAFe guides)
  • In the ServiceNow ecosystem 3 seniority levels are often differentiated , a person with 0-2 years is a junior, a person with 3-5 years is a medior, and a person that has more years experience is a senior.
  • The Internal Loaded Labor Rate (LLR) is the sum of the the gross salary of an internal employee, plus all cost of the employer, divided by the expected number of workdays (200) per annum. The LLR on average is 75% higher than the Gross Salary per day incl. holiday/bonus (this percentage differs per company).
    • Internal Employees of the company that uses the platform, typically get a gross monthly salary, 8% holiday allowance and -on average- 5% bonus. The income is taxed by the Dutch governance. The tax rate differs per tax bracket (in Dutch: belastingschijf). Different Tax discounts exist, varying in height and per circumstance.
    • Employers typically pay 35% on top of the gross salary for all kinds of employer related taxes and premiums. Furthermore the employers pay approximately 30% for HR, Finance, ICT, Payroll, Legal, events and other personnel overhead.
  • Companies that use contractors pay a daily/hourly fee. In the Netherlands, contractors typically are hired via a payroller. Professional recruiters search/sell the contractors. Every party gets paid for their value add. As a result, the loaded day rate for a contractor who is employed by an agency often is 30% higher than that of internal employee of the company, who has similar skill set. Self employed contractors that do not have a the same overhead cost, often are 15%-20% cheaper than employees of agencies.
  • The Big-Five Consultancy firms in the Netherlands (EY, KPMG, Accenture, Deloitte, and PWC) each have a defined ServiceNow offering/practice. The local consultants of the big-five typically have relatively high day rates, e.g. because their salaries are higher than others and their offices/cars are much nicer :-). That said, the big-five don’t have to invent the wheel each project, they have done that already up-front and hence can often deploy months faster than companies/agencies that do not have predefined practices. Furthermore, the Big-Five companies make use of developers e.g. in India (off-shore), or Portugal (near-shore). The big-five can offer a blended rate; total expected cost divided by total number of hours.. The total implementation price depends on spread of off-shore, near-shore and local resources AND on the total project duration.

Best Practice Recommendations

When asked i recommend the following:

  • The Platform Owner is a full-time senior person who is accountable for cost, contracts, compliance, strategy of the Platform. It is highly recommended to have this role filled by an internal employee with 6+ years experience. The Loaded Labor Rate for such person typically is 1200-1400 Euro per day.
  • The ServiceNow Architect is a experienced (6+ years) person who lives and breathes ServiceNow and its Integrations. If a company has Enterprise Architects in house, the solution/platform architect may be outsourced. Large enterprises with large/complex ServiceNow Implementations and Integrations are recommended to recruit one (or temporarily hire an independent Self Employed Contractor, until an adequate internal resource is made available).
  • The Product Owner is a knowledgeable person, who determines the priority/orders of the stories that are to be implemented, together with the internal stakeholders and the implementation team. If the project is outsourced to on of the big-five companies, it is recommended to have the product owner role sourced locally by the big-five company. That person will probably be called Senior Project/Program Manager (1800-2000 euro per day). For small deployments, a part-time resource may suffice. If the project is done in-house or is partly-outsourced, it is recommended the company appoints an independent Product Owner (i.e. an internal employee (800-1000 Euro per day) or temporary contractor (1000-1200 euro per day)). Once the initial implementation is finished, companies are advised to appoint a full-time skilled internal resource who manages both dev as well as ops. For large/complex deployments one Product Owner, will unlikely suffice. The cost price of an internal Product Owner is approx 1000-1200 euro per day.
  • The Operational Change in the company needs to be managed by an (Operational) Change Manager, a person with 3-5 years experience who is a skilled communicator who know the (culture in) the organization and who can (optionally) be a trainer. Change Managers, typically become process owners/managers once the project is finished. Their day rate is 800-1000 euro per day.
  • If the product owner is provided by one party, it is recommended to have the scrum master provided by the other party. Scrum Master is not a full-time role and may well be combined with a local PMO prole. If the development is done off-shore or near-shore, Scrum master may also be fulfilled by a Developer who is based off-shore or near-shore.
  • The (local) Business Analyst is liaison between Company and the ServiceNow Partner and v.v.. They are predominantly needed during the project and limitely thereafter. It is recommended to have a mix of internal consultants (who will stay after the project is done, 400-800 euro per day, subject to seniority) and external consultants (who will disappear after the project, 700-1600 Euro per day, subject to seniority). A blend of 1 senior/medior per 2 juniors is recommended.
  • The ServiceNow Developers that are used during the project should be external (unless if the project is fully done in-house). The ServiceNow Developers can be (partly) insourced after the project, so that enhancements and upgrades can be done in-house without being dependent on the partner. Whether to sourcing the developers locally, near-shore or off-shore depends on a lot of factors. That said, most companies will outsource innovation and technical maintenance of the ServiceNow Platform to the Partner (300-1000 euro per day per person, subject to seniority/location). A lot of partners provide a local point of contact with support from developers and service desk in india.
  • When a lot of integrations or configurations are done, it makes sense to have those tested by specialised Test Engineers. Since they are verifying the acceptance criteria, they are best recruited/hired by the company (ie. internal staff (350-700 euro per day), or contractors (650-950 euro per day).

Conversion table

The table below lists the relation between the following:

  • Daily LLR; the total cost of an internal employee (or contractor) per workday, including ICT, Training, HR, transportation, etc.
  • Hourly LLR, the Daily LLR devided by 8 hours per day.
  • Monthly LLR, the Daily LLR multiplied by 200 days per year, divided by 12 months per year
  • Yearly LLR, the Daily LLR multiplied by 200 days per year.
  • Employee Monthly Salary (gross); incl. 8% holiday and incl. 5% bonus per month
  • Employee Monthly Salary (nett), what the employee actually gets paid per month.
  • Employee Annual Salary (gross);incl. 8% holiday and incl. 5% bonus per annum
  • Employee Annual Salary (Nett) incl. 8% holiday and incl. 5% bonus per annum

  • Tax Perc.: Calculated average percentage of tax (3-46%) for this salary in the Netherlands

The yearly LLR for a contractor is what is invoiced for a contractor. This includes:

  • The fee for the payroller/administrator (2-4%)
  • The fee of the recruiter (approx. 20% for short term assignments)
  • The gross margin for the agency (if the contractor is employed by that agency), typically 35%
  • The costs of the contractor (e.g. car, ICT, insurances, office, training, subscriptions, accountant, etc), typically 15-20%
  • The Taxes, premiums and pension contributions, that the agency pays for its employees
  • The income Taxes that the ZZP’er/Contractor pays
  • The reservations for risks which the ZZP’er has e.g. for unemployment, long term illness, pension

A ZZP’er who can invoice 200 days per year, typically has a 20-30% higher gross income than a comparable employee who is employed (by the company or by the agency).
That said, the ZZP’ers are not entitled to a pension, unemployment benefits, or payment during long-time illness. This can be ensured/financed, but is rather expensive.
If ZZP’ers ensure/reserver all the risks that for employees are covered, the ZZP’ers end up with approximately the same nett income as a comparable internal employee.

The table below:

  1. Shows the Loaded Labor Rate for a known Gross/Nett Employee Salary of an internal employee
    e.g. an Employee who has a salary of 91K Euro per year, costs the company 800 euro per day
  2. Shows the Gross/Nett Salary that a similar internal employees would get, compared to a Contractor that has a certain Day rate
    e.g. a Contractor for whom 800 per day is invoiced, may be replaced by an employee who is paid an annual gross salary of 91K (Annual LLR of 160K)
    e.g. an internal employee who is is paid 91K per annum, incl. bonus/holiday (160K LLR), may be replaced by a ZZP’er for whom 800 Euro per day is invoiced.
  3. Shows the cost of a Contractor per month/year that has a certain day rate
    e.g. a Contractor for whom 800 Euro per day is invoiced, costs the company 160K per annum (13,3K per month)
  4. Shows the Dutch Tax rates for a certain gross salary.
    e.g. an internal employee who has a gross annual salary of 91K Euro, has to pay 36% income tax.