Full-time Equivalent (FTE)
Full-time equivalent is a metric used to quantify employee workload by standardizing hours worked into full-time units. One FTE is typically equal to 40 hours per week, but this may vary based on company policies or industry norms. The FTE calculation helps organizations assess workforce capacity, budget for salaries, and determine benefits eligibility for part-time employees.
By converting part-time and temporary positions into FTE values, HR teams can make informed staffing decisions and optimize resource allocation. For example, two employees working 20 hours per week would collectively be counted as one FTE. Understanding FTE data allows businesses to evaluate labor costs, measure productivity, and comply with labor regulations regarding benefits and working conditions.
FAQ
How do I calculate FTE (Full-Time Equivalent)?
FTE (Full-Time Equivalent) is a way to measure how many full-time employees your part-time and full-time staff add up to.
Step-by-step:
- Define full-time hours
Typically 40 hours per week (can vary by organization). - Calculate each employee’s hours
Count the number of hours each employee works per week. - Use the FTE formula:
FTE=Total hours worked by all employees / Full-time hours per employee
Example:
- Full-time standard = 40 hours/week
- Employee A (full-time): 40 hrs
- Employee B (part-time): 20 hrs
- Employee C (part-time): 10 hrs
FTE= (40+20+10)/ 40 = 70/40. This means you have the equivalent of 1.75 full-time employees.
Free Resources
Get the juicy scoop from the 22,000+ HR Slack Community - The Shape of Work, powered by Springworks.