Although you have four individuals on staff, the workload is equivalent to 2.75 full-time employees. Understanding FTE is crucial for recruiters as it helps in budgeting for salaries, planning workforce needs, and ensuring adequate staffing levels to meet organizational goals. It also aids in reporting and analyzing workforce data accurately, especially when managing diverse employment types. Three full-time employees would have an FTE of 3.0 and the part-time FTE is 0.875. The list should include the employee’s name and the number of hours they work per week. It means that an employee is working the standard number of hours expected for a full-time position within your organization.

With headcount, each individual counts as one unit, regardless of the number of hours worked. A 0.9 FTE means an employee works 90% of the hours of a full-time employee. If your company uses the standard 40-hour workweek, 0.9 FTE represents 36 hours per week (0.9 x 40). If you use 32 hours, however, 0.9 FTE represents 28.8 hours of work each week.

This standardization can help you assess whether you have the resources needed to meet your company’s goals. For example, project managers (PMs) may use FTE to evaluate workload and labor costs. If a project requires 100 hours of work, calculating FTE helps determine whether your team has enough collective hours available, not just enough people. If the FTE calculation falls below this figure, the PM might add a team member or adjust the project timeline.

• So, whether you’re a business owner, HR professional, or just curious about how work can be measured, understanding how to calculate FTE is a crucial part of effective workforce management.
• ‍With our online FTE calculator, you can easily calculate your FTEs for full-time employees and part-time employees.
• It brings more precision to staffing decisions, improves cost tracking, and makes internal reporting easier to manage
• Calculate the FTEs by determining the number of hours worked by full-time or part-time employees in a year.
• Let’s say those 35 employees all work 20 hours per week, while the remaining 165 work 40 hours per week (considered full-time at your organization).

The Quiet Cost of Reformatting Resumes

FTE is an indispensable metric in HR management, aiding in workforce planning, budgeting, and strategic decision-making. Understanding how FTE interacts with part-time employees and its role in recruitment and staffing is vital for effective HR operations. Full-Time Equivalent (FTE) is a critical metric in workforce management that expresses the total workload of employees in terms of full-time positions.

• Headcount refers to the total number of people employed by your organization, including both full-time and part-time employees.
• While FTE and headcount are often used interchangeably, they represent different concepts.
• For example, if full-time is 35 hours per week, and you have two part-time employees working 17.5 hours per week, that would total 1.0 FTE.
• To calculate the total number of hours worked during the year, add 6,240 + 1,040 + 520.
• In practice, FTE is measured by companies to estimate the number of full-time employees employed within a specific time frame.

Start using Time

The IT specialist works 20 hours per week, which totals 1,040 hours for the year, and the marketing assistant works 10 hours fte full form in company per week. If your company uses a 40-hour workweek, multiply 40 by 52 to get the standard number of full-time hours worked each year (2,080). Other companies may adjust if they use standard schedules such as 35 hours per week. Many organizations use a 40-hour workweek, but it depends on your location and policies. Multiply by 52 to get the standard number of full-time hours worked per year. Indeed’s Employer Resource Library helps businesses grow and manage their workforce.

The role of FTE in talent management and development

For instance, an employee working 20 hours per week in a 40-hour workweek is counted as 0.5 FTE. Unlike hourly wages, FTE salaries provide a consistent income regardless of slight variations in hours worked. This method also helps determine benefits eligibility, as many companies offer full benefits to employees working above a certain FTE threshold, typically 0.75 or higher. Calculating FTE involves simply adding the hours of full-time, part-time, and contingent employees into measurable ’full-time’ units. Full-time equivalent is used in benefits administration to determine eligibility for certain benefits. For example, employees workers who work a certain percentage of full-time hours may be entitled to some statutory employee benefits as mandated by law.

You can use these calculations to estimate your staffing needs for a specific period. Once you know the total hours worked and the full-time workweek, apply the FTE formula. To calculate the FTE value, simply divide the total hours worked by the number of hours in a full-time workweek.

What are the benefits of using FTE as a metric in workforce planning?

The list should contain the names of your employees as well as the full number of work hours for a single week. Try to include employee leave (both paid and unpaid) in the overall number of work hours to make your results more accurate. The first step to calculating the FTE of your company is to make a list of all of your employees. Regardless of the type of business you’re in, it’s important to keep an updated number of your employees and the hours they dedicate to their work duties. Every employee has a cost to the company (CTC), which differs according to the designation, role, and experience. More experienced employees are expected to provide more work in less time relative to less experienced ones.

If part-time employees are involved, such as three employees each working 20 hours per week (1.5 FTE), the project would take approximately 10 weeks. Human resources often use the FTE metric to make staffing decisions for the entire company. Let’s say you need to calculate the total amount of hours, time, and money required for your business to run successfully.

By understanding the total FTE for a given period, managers can predict labor costs and allocate budgets more efficiently. Furthermore, having a clear idea of the FTE provides a basis for calculating the costs and benefits of hiring additional staff, offering overtime, or choosing to hire part-time workers instead. FTE provides a relatively accurate representation of labor demands across different periods. FTE becomes especially useful in comparing productivity levels between full-time and part-time staff. By having all the workforce hours converted into equal measures (FTE), managers can compare productivity on a level playing field. It can help in uncovering underlying issues that might not be apparent when simply considering the total hours worked.

This feature is especially helpful for remote teams that require extra visibility. It also records screen activity in short video segments, offering an extra layer of compliance, training, and audit readiness. By understanding how time is spent visually, managers can make more informed decisions when calculating FTE across various roles. Knowing your exact FTE count allows you to estimate labor costs with greater accuracy. From salary planning to benefits and overtime projections, your budget becomes more realistic and easier to manage. They quickly total the hours your team worked, adjust for different schedules, and deliver your FTE number in seconds.

Comparing Full Time Equivalent and Headcount

In contrast, FTE standardises all employees into the equivalent of full-time workers, providing a more accurate measure of the total workforce’s capacity. For example, a company may have 10 employees (headcount), but if 5 of them work part-time, their FTE might only be 7.5. By distinguishing between headcount and FTE, companies can better understand the actual work being done and plan more effectively for recruitment, labour costs, and productivity.